- UK Gov't May Have to Borrow Over $210Bln in 2020/21 to Deal With COVID-19 Impact - Charity
UK Gov't May Have To Borrow Over $210Bln In 2020/21 To Deal With COVID-19 Impact - Charity
Faizan Hashmi 6 days ago Fri 27th March 2020 | 12:06 AM
The UK government may have to borrow more than 175 billion British pounds ($212.5 billion) in the next financial year, which begins on April 1, to deal with the consequences of the coronavirus outbreak, the London-based Institute for Fiscal Studies (IFS) said on Thursday
MOSCOW (UrduPoint News / Sputnik - 26th March, 2020) The UK government may have to borrow more than 175 billion British pounds ($212.5 billion) in the next financial year, which begins on April 1, to deal with the consequences of the coronavirus outbreak, the London-based Institute for Fiscal Studies (IFS) said on Thursday.
"The response to the covid-19 pandemic has led to a sharp downturn in economic activity. It has also, rightly, prompted a substantial fiscal policy response, the cost of which will add directly to government borrowing," IFS research economist Isabel Stockton said.
Early this week, investment bank Morgan Stanley forecast a 5-percent recession in the UK this year due to the COVID-19 pandemic, the IFS recalled. This would effectively make the country's economy 6 percent smaller than the government's official forecast of a 1.1-percent growth this year unveiled by Chancellor of the Exchequer Rishi Sunak during the budget presentation in the parliament two weeks ago, it added.
"Only taking account of measures announced so far, and even if the economy 'only' shrinks by 5% per cent this year, we might expect borrowing in the coming financial year to exceed �175 billion, or more than 8% of national income.
This would be more than triple the amount forecast in the Budget just two weeks ago," Stockton said.
According to the UK government, the total number of COVID-19 cases in the country was at 9,529, with the death toll stood at 463, as of Wednesday. Late on Monday, UK Prime Minister Boris Johnson announced stricter measures to curb the spread of the virus and told the British to stay at home for the next three weeks to relieve the pressure on the healthcare system amid the coronavirus outbreak.
The country's authorities are also preparing to deal with the epidemic's economic consequences. Last week, the Bank of England lowered the key rate to a record 0.1 percent and boosted its holdings of UK government and corporate bonds to 645 billion British pounds ($749 billion) from previous 435 billion British pounds in a bid to support the economy amid the COVID-19 crisis.