PwC comments on the latest public finance data

Alex Tuckett, senior economist at PwC, comments on today's public finance data:

"Public Sector Net Borrowing (PSNB) for April was estimated by the ONS at £62.1bn, the highest monthly number since records began in 1993. Although this was slightly below the OBR's forecast, there should be no doubt over how dramatic this number is; in one month the government has borrowed almost as much as in the entirety of the 2019/20 financial year. 

"The Public Sector Net Cash Requirement (which is less subject to revision) also set a record for the highest amount (£63.5bn) since records began in April 1984. Net debt rose to 97.7% of GDP, 17.4 ppt higher than April 2019 and the sharpest year-on-year increase since records began. 

"The dramatic deterioration in public finances was driven both by a more than 25% fall (relative to April 2019) in tax receipts as the economy contracted in response to the COVID-19  crisis, and an even more dramatic increase in expenditure (over 50% relative to April 2019), as the government has spent heavily on schemes such as the Coronavirus Job Retention Scheme. Large monthly borrowing figures will continue until the economy recovers and some aspects of fiscal support can be scaled back." 

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