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UK borrowing halves on withdrawal of Covid support

LONDON (AFP) – United Kingdom (UK) annual borrowing tumbled by more than half after costly emergency Covid measures were withdrawn, official data showed yesterday.

Public sector net borrowing sank to GBP151.8 billion (USD193.4 billion) in the year to the end of March, the Office for National Statistics said in a statement.

That was still the third largest amount on record and overshot Britain’s official forecast of GBP128 billion.

And analysts warned of other troubles as the UK battles decades-high inflation. “Risks… remain for the months ahead, notably stemming from the mounting cost-of-living crisis, which is set to weigh on confidence and economic activity in the coming year,” Centre for Economics and Business Research economist Karl Thompson said.

Emergency pandemic support measures sent borrowing rocketing in the prior 2020-2021 financial year to a record GBP317.6 billion.

Britain pumped hundreds of billions of pounds into the economy during the pandemic, including a costly furlough scheme that kept millions of private sector workers in jobs. As a result, total government debt topped GBP2.3 trillion at the end of March.