UK borrowing shows first annual fall since start of pandemic

LONDON: Britain's massive public borrowing started to head on a downward path in April for the first time since the start of the coronavirus pandemic, official figures showed on Tuesday.

Public sector borrowing in April, the first month of the new financial year, totalled 31.7 billion pounds ($44.9 billion), down from 47.3 billion pounds a year earlier when the government finances felt the greatest impact of the COVID pandemic.

Britain's government has spent heavily over the past year on health measures to limit the impact of COVID-19 as well as wage guarantees to stop unemployment rising significantly during the sharpest economic downturn in more than 300 years.

Borrowing in the 2020/21 financial year was 300.3 billion pounds or 14.3% of annual economic output, the highest share on this measure since the end of World War Two but slightly lower than an initial estimate a month ago.

British government budget forecasters predicted in March that borrowing would fall to 10.3% of GDP this financial year.

"At the Budget, I set out the steps we are taking to keep the public finances on a sustainable footing by bringing debt under control over the medium term.

But we also need to focus on driving a strong economy recovery from the pandemic," finance minister Rishi Sunak said after the data.

Public sector net debt as a share of GDP is its highest since 1962 at 98.5%, equivalent to 2.171 trillion pounds.

But unlike earlier decades, interest rates are far lower, reducing both debt servicing costs and the urgency of lowering debt levels that previous governments felt.