Professor Abhinay Muthoo, Warwick Economics, said:
“The Office for National Statistics (ONS) has today reported that the UK Government borrowed £303.1bn in the 2020/21 financial year.
“This is, of course, a staggering amount of borrowing in one year, around 14.5% of UK GDP. But no one should be surprised – this was done to deal with the unprecedented health crisis we faced, and to support people, jobs and businesses in what was a hugely challenging year. Indeed, had the Chancellor Rishi Sunak not borrowed to the level he did, there would have been even greater and more widespread suffering, including mass unemployment and huge scars in the economy.
“This level of borrowing was both necessary and the right thing to do.
“We should also not be overly concerned. The fundamentals of the UK economy have always been – and continue to be – very strong. We should plan to pay back the huge debt over the next two decades or so, and we will.
“It should, and will, be paid back mainly on the back of strong economic growth over the coming years, and less so by huge tax increases.
“Indeed, the government should and will need to continue to borrow (but at a much lower level of course) to support and spur economic growth, by spending more on investment in, for example, education and skills, health and infrastructure.”
23 April 2021
Media Relations Manager