UK government borrowing sank in May as the easing Covid lockdown boosted the economy and tax revenues, but remains elevated on costly pandemic support, official data showed Tuesday. Public sector net borrowing, the state’s preferred measure of the deficit, slid to £24.3 billion ($33.7 billion, 28.3 billion euros) last month, the Office for National Statistics (ONS) said in a statement.
However, that was still the second highest May level since records began after £43.8 billion in May 2020 at the height of the pandemic. The ONS also revised down borrowing for the financial year to the end of March to £299.2 billion — but this remained the highest level since World War II. The public purse has been plagued by emergency Covid measures, in particular, a furlough scheme which has paid the bulk of private-sector wages for millions of workers across the UK during the crisis. However, the economy is regaining its footing thanks to a phased reopening.
Bars and restaurants restarted outdoor dining in April and indoor services in May. That came after non-essential retailers reopened their doors in April. “May’s public finances figures suggest the strong economic recovery is starting to feed through into lower government borrowing,” said Capital Economics analyst Thomas Pugh. The economy is set to fully reopen on July 19 after the government recently delayed the date by four weeks due to surging Delta infections. Total government debt meanwhile sat at £2.2 trillion at the end of May, or 99.2 percent of gross domestic product. That was the highest ratio since 1962.
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