ECONOMY
Borrowing edges down to £24bn in May as economy reopens

The Government borrowed £24.3bn in May, the second-biggest ever deficit for that month according to the Office for National Statistics.

It is down from £29.1bn in April and from £43.8bn in May 2020 when the economy was still in the depths of the first lockdown.

This takes the national debt up to £2.2 trillion, or 99.2pc of GDP.

The slowdown to this still-high level of monthly borrowing shows some life is coming back into the economy as the restrictions imposed in the latest lockdown are eased.

Total receipts last month rose to £56.9bn, up 15pc on the year. VAT jumped by almost a quarter as shops reopened, fuel duty revenues more than doubled as far more people are leaving their homes now than a year ago, and stamp duty incomes surged by 89pc on a boom on the property market.

Meanwhile Government spending is falling as the need for emergency programmes slows.

Central Government bodies spent £81.8bn in May, down by almost 12pc on the year.

Spending on subsidies tumbled by more than half to £8.3bn, which includes £2.5bn on furlough – down from around £10bn in the same month of 2020.

However interest payments rose by one quarter to £4.3bn in the month, in part because inflation increased and a share of Government debt is linked to the retail price index.

Spending remains high on procurement, at £17.4bn, with vaccines and test and trace continuing to call on the public finances.

Rishi Sunak, the Chancellor, said: “As we emerge from the pandemic, we are continuing to support people and businesses to get back on their feet and our Plan for Jobs is working.

“It’s also important over the medium term to get the public finances on a sustainable footing. That’s why at the Budget in March I set out the difficult but necessary steps we are taking to keep debt under control in the years to come.”

Source: Telegraph.co.uk

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