Rishi Sunak ‘will stop the Government borrowing money to pay for day-to-day spending within three years’ as the Chancellor tightens the UK’s belt after the coronavirus crisis caused the national debt to climb above £2trillion
- Rishi Sunak will reportedly unveil new set of ‘fiscal rules’ at Budget next month
- He will commit to no borrowing to pay for day-to-day spending in three years
- The Chancellor also wants national debt to be falling by middle of the decade
Rishi Sunak is planning to stop the Government borrowing money to pay for day-to-day spending within the next three years as part of a plan to improve the UK’s ailing public finances, it was claimed today.
The Chancellor will reportedly use the Autumn Budget next month to unveil a new set of ‘fiscal rules’ which will guide ministers in the years ahead.
As well as the proposal to get Government borrowing back under control following the huge spending seen during the coronavirus crisis, Mr Sunak also wants to see the national debt begin to fall by the middle of the decade.
Rishi Sunak is planning to stop the Government borrowing money to pay for day-to-day spending within the next three years, it was claimed today
The UK’s national debt has soared to levels last seen in the early 1960s as a result of the coronavirus crisis
The plans, first reported by the Financial Times, come amid rising fears in Whitehall about the threat posed by high inflation and potential interest rate rises.
There are concerns about the impact a rates rise would have on the UK’s ability to service its debt.
The new rules apparently being pursued by Mr Sunak suggest that next month’s Budget could be frugal in its approach.
Government borrowing rocketed during the coronavirus crisis as ministers scrambled to keep the UK economy afloat.
Borrowing in the financial year ending March 2021 was at a level last seen at the end of World War Two.
That trend has continued to a lesser degree in the current financial year, with borrowing far above normal levels.
Public sector borrowing in the financial year to July was estimated to have been £78billion.
That is the second-highest number recorded for that period since records began in 1993. It was £61.6billion less than in the same period last year.
Government borrowing surged to record levels in 2020 as ministers scrambled to prop up the UK economy during the pandemic
Massive spending during the pandemic has seen public sector debt soar to record levels.
The national debt stood at more than £2.2trillion at the end of July this year, according to the Office for National Statistics.
That is equivalent to approximately 98.8 per cent of UK Gross Domestic Product, the highest ratio since the 99.5 per cent recorded in March 1962.