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Coronavirus: Government bill for tackling virus rivals WW2 cost

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The cost of the government’s efforts to combat the coronavirus pandemic has risen to £123.2bn, according to latest estimates from the government’s independent economics forecaster.

The Office for Budget Responsibility’s previous estimate was £103.7bn. The increased cost of the government’s furlough scheme is the main cause.

It now expects annual borrowing to equal 15.2% of the UK economy.

That would be the highest since the 22.1% seen at the end of World War Two.

The extra spending has pushed the deficit identified for 2020-21 in the OBR’s reference scenario, which it says is not a formal forecast, above the 15% in 1945-46, which included VE Day.

Borrowing for this year is calculated to be £298bn, up £26bn on the first attempt to calculate the impact of the pandemic a month ago.

This is mainly because of the extra costs of extending the furlough scheme to the end of July.

Including the extra extension of a modified scheme until October could add an additional £20bn, depending on the as yet unannounced details of the scheme.



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Written by sortiwa

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