The UK’s economic recovery from the coronavirus pandemic seems to be quicker than anticipated. During the third quarter it was estimated that the country’s economic recovery for the year will be slower, however, the record appears to be in contrast to previous estimates.
On the other hand, new lockdown measures on the back of discovering a new strain is threatening to cause another recession. Recent data suggests that the UK government’s borrowing levels had increased in the previous month. It had increased borrowing owing to the rising cost associated with the coronavirus.
The International Monetary Fund said that the UK will need to increase its taxes following the pandemic to fill the economic gaps. The country’s current deficit widened to 15.7 billion pounds, equivalent to 2.9 percent of GDP. Finance minister Rishi Sunak said “When our economy recovers, it’s right that we take the necessary steps to put the public finances on a more sustainable footing.”
The country’s public debt stood at nearly 2.1 trillion pounds, or 99.5 percent of GDP. It is observed to be the highest ratio since 1962. That said, companies in the country have been deeply hurt by the pandemic this year, with the GDP falling to historic lows.
The Office for Budget Responsibility, the watchdog for the UK government’s spending, had suggested 1.1 percent growth in 2021, which was prior to the new strain’s discovery. In November, the country’s borrowing rate had reached 31.6 billion pounds, which was 40 percent higher than October.