Government borrowing hits £303 billion, highest since World War II

The government borrowed £303 billion in the year to March, the highest level since the end of World War II.

While the amount borrowed is undeniably high, it is much lower than the £394 billion forecast as recently as November.

That’s a sign that the economy is bouncing back and has got used to dealing with lockdowns.

Chancellor Rishi Sunak has benefitted from very low borrowing costs. But since much of the debt is held by the Bank of England, if the Bank itself puts interest rates up, the costs of servicing the debt immediately rise.

The release from the ONS said: “Although the impact of the pandemic on the public finances is becoming clearer, its effects are not fully captured in this release, meaning that estimates of accrued tax receipts and borrowing are subject to greater than usual uncertainty.”

As a percentage of GDP, borrowing is at 14.5%. It hit 15.2% in 1946.