Britain’s public sector borrowing surged to £36.1 billion in September, £28.4bn more than a year earlier, as the government’s heavy spending to prop up the economy continued amid the Covid-19 pandemic.
While September’s borrowing was the third-highest figure since records began, according to the Office for National Statistics, Britain’s budget deficit in the first half of the fiscal year climbed to £208.5bn as extra spending was needed to pay furlough wages and support businesses.
Whilst it's clear that the coronavirus pandemic has had a significant impact on our public finances, things would have been far worse had we not acted in the way we did ...
Separately, annual consumer price inflation rose to 0.5 per cent in September from 0.2 per cent in August, when the inflation rate was reduced by UK finance minister Rishi Sunak's discount dining scheme, Eat Out to Help Out.
"Whilst it's clear that the coronavirus pandemic has had a significant impact on our public finances, things would have been far worse had we not acted in the way we did to protect millions of livelihoods," Mr Sunak said in a statement after the public sector borrowing figures were published on Wednesday.
"Over time and as the economy recovers, the government will take the necessary steps to ensure the long-term health of the public finances."
The national debt is now 103.5 per cent of gross domestic product – the highest ratio since the financial year ending 1960. The £208.5bn borrowing figure for the April to September period is also the highest since records began in 1993, and £174.5bn more than in the same period last year.
“The coronavirus has had an impact on public sector borrowing that is unprecedented in peacetime,” the ONS said.
“Provisional estimates indicate that the £208.5bn borrowed in the first half of the current financial year (April to September 2020) was nearly four times the £54.5bn borrowed in the whole of the last full financial year (April 2019 to March 2020).”
While the inflation figure was slightly more positive, the headline rate has been at less than half the Bank of England’s 2 per cent target since April, when the UK completed its first full month of lockdown.
“The UK's inflation number, which has moved in a positive direction, came ahead of the expectations,” said Naeem Aslam, chief market analyst at Avatrade. “The number printed the reading of 0.5 per cent against the forecast of 0.4 per cent. The improvement in the CPI number has also helped to move higher as well. It is likely that we may see the currency pair cross 1.30 against the dollar.”
Paul Dales, chief UK economist at Capital Economics, said an inflation rate of just 0.5 per cent in September and new Covid-19 restrictions darkening the economic outlook once again, makes it "hard to think of reasons why the Bank of England won’t launch another £100bn or so of quantitative easing at the policy meeting on 5th November".
Bank of England policy maker Gertjan Vlieghe said on Tuesday that risks are tilted towards more stimulus.
The budget deficit – the amount the government needs to borrow to fund its spending – was on track to hit £400bn in the current fiscal year even before Mr Sunak announced further measures to support jobs and wages in recent weeks.
"There is little sign of the increase in spending and fall in receipts getting smaller. With the recovery petering out, a strong rebound in tax receipts looks unlikely in the months ahead either," said Andrew Wishart, UK economist at Capital Economics
While the government will make its last payments to workers on furlough through the Coronavirus Job Retention Scheme in October, the new Job Support Scheme, which includes furlough payments for staff of businesses forced to close, will begin. With the virus continuing to force more areas into Tier 3 lockdowns, the government is more likely to increase fiscal support further than scale it back."
In another sign of the uncertainty, the government said on Wednesday it was cutting the length of its upcoming spending review to just one year, rather than the planned three.
Mohammed bin Zayed Majlis
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
2018 ICC World Twenty20 Asian Western Sub Regional Qualifier
Event info: The tournament in Kuwait is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.
Teams: UAE, Bahrain, Saudi Arabia, Kuwait, Maldives, Qatar
Friday fixtures: 9.30am (UAE time) - Kuwait v Maldives, Qatar v UAE; 3pm - Saudi Arabia v Bahrain
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
MATCH INFO
Norwich 0
Watford 2 (Deulofeu 2', Gray 52')
Red card: Christian Kabasele (WatforD)
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
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The specs
Engine: 3.0-litre 6-cyl turbo
Power: 435hp at 5,900rpm
Torque: 520Nm at 1,800-5,500rpm
Transmission: 9-speed auto
Price: from Dh498,542
On sale: now
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Tips for used car buyers
- Choose cars with GCC specifications
- Get a service history for cars less than five years old
- Don’t go cheap on the inspection
- Check for oil leaks
- Do a Google search on the standard problems for your car model
- Do your due diligence. Get a transfer of ownership done at an official RTA centre
- Check the vehicle’s condition. You don’t want to buy a car that’s a good deal but ends up costing you Dh10,000 in repairs every month
- Validate warranty and service contracts with the relevant agency and and make sure they are valid when ownership is transferred
- If you are planning to sell the car soon, buy one with a good resale value. The two most popular cars in the UAE are black or white in colour and other colours are harder to sell
Tarek Kabrit, chief executive of Seez, and Imad Hammad, chief executive and co-founder of CarSwitch.com
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
The years Ramadan fell in May
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
