Pandemic causes huge increase in UK borrowing

As part of his Spending Review today, UK chancellor Rishi Sunak revealed Office for Budget Responsibility figures which forecast a massive spike in the budget deficit in 2020-21 to almost £400 billion.

As this chart shows, 2019-20's £56.1 in public sector net borrowing will be eclipsed this fiscal year, due in large part to the coronavirus pandemic and the government's response to it. The forecast £393.5 billion would be the largest peacetime deficit ever recorded.

Sunak informed the House of Commons that the government has spent £280 billion this year to help the country through the crisis and warned of 'long term scarring', manifesting in an economy around 3 percent smaller in 2025 than previously expected in March.