The UK has hit an all time borrowing high according to the Office for national statistics (ONS.)
The ONS reported that borrowing hit £22.3bn last month, the highest October figure on record.
Since April Government borrowed £214bn, £169bn more than a year ago.
The Office for Budget Responsibility (OBR) estimates it might reach £372bn by March 2021.
The government sells bonds in the financial market to acquire this money.
These bonds are mainly bought by pension funds, investment funds, banks, insurance companies and other institutions, although private investors can also buy them.
The extreme level of borrowing this year has spiked the national debt to £2.08 trillion, a number larger than the British economy.
Our debt has peaked at 100.8% of GDP, something not seen since the 1960’s.
The OBR will publish its latest forecast next week in anticipation of the Chancellor’s Spending Review.
Sunak has proposed pay restraint in the public sector, in an effort to match the struggling private sector.
This would freeze the pay of millions of workers, but also allow the Treasury to shore up public finances.
Public finances need to be put “on a sustainable path” said the chancellor, after the massive debt incurred fighting Covid-19.
“We’ve provided over £200bn of support to protect the economy, lives and livelihoods.”
All time borrowing high…Should we be concerned?
Dr Jonathan Gillham, chief economist at PwC, said we should not be “overly concerned” by our mounting debt.
“The Bank of England has committed to buy another £150bn of public debt, the UK’s credit rating is relatively stable and borrowing remains cheap.
“ONS figures for October show interest on borrowing fell by £4.4bn compared to October last year.”
Michael Hewson, of CMC Markets, said despite the rate of high borrowing, this is not be the time to pull back spending.
“While it is entirely understandable for there to be a debate about these unprecedented levels of public borrowing, one has to question whether now is the right time to do it, given that we haven’t as yet defeated the virus, or even got a vaccine programme in place yet.
“It’s hard to imagine that there would have been similar conversations being had in 1940, when the country was one year into World War Two.”