Britain plans to sell a record £275bn (€302bn) of government debt from the start of April to the end of August to pay for its huge spending response to the coronavirus pandemic, more than double its borrowing in the whole previous financial year.
The updated figure from the Debt Management Office (DMO) represented a €50bn increase from its previous estimate for the April-to-July period.
Britain’s government has ramped up its bond issuance to pay for a surge in borrowing caused by a collapse in economic output during the coronavirus lockdown.
The DMO said it would keep up the current pace of debt sales until the end of August, having already raised more than £181bn in bond sales since April.
The plan to raise at least £275bn in the first five months of the 2020-2021 financial year is more than double the £136.8bn remit for the entire 2019-2020 financial year.
An emergency public spending surge and tax cuts, combined with a slump in tax revenues, will blow a nearly £300bn (€330bn) hole in the budget in the current financial year, the country’s fiscal watchdog has said, taking deficit to wartime levels.
Allowing for the relative sizes of the economies, Britain's deficit is likely to be close to the deficit of up to €30bn facing the Irish exchequer this year.
To help finance the budget gap, the National Treasury Management Agency here plans to raise up to €24bn from sovereign debt markets this year, double the amount it had anticipated before the onset of the Covid-19 economic crisis.
Reuters and Irish Examiner staff