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| Version 1 | Version 2 |
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| Coronavirus: UK borrowing to see 'colossal increase' to fight virus | Coronavirus: UK borrowing to see 'colossal increase' to fight virus |
| (32 minutes later) | |
| The UK's budget deficit is set to see "an absolutely colossal increase to a level not seen in peacetime", the director of the Institute for Fiscal Studies has said. | The UK's budget deficit is set to see "an absolutely colossal increase to a level not seen in peacetime", the director of the Institute for Fiscal Studies has said. |
| The economic impact of coronavirus was likely to push the deficit to as high as £260bn, Paul Johnson told the BBC. | The economic impact of coronavirus was likely to push the deficit to as high as £260bn, Paul Johnson told the BBC. |
| He was speaking after latest figures showed that the deficit hit £48.7bn in the 2019-20 financial year. | He was speaking after latest figures showed that the deficit hit £48.7bn in the 2019-20 financial year. |
| But Mr Johnson said those figures were "the numbers before the storm". | But Mr Johnson said those figures were "the numbers before the storm". |
| The deficit last year - the gap between the government's income and its expenditure - was £9.3bn higher than in the 2018-19 financial year and equivalent to 2.2% of GDP. | The deficit last year - the gap between the government's income and its expenditure - was £9.3bn higher than in the 2018-19 financial year and equivalent to 2.2% of GDP. |
| The Office for National Statistics, which released those figures, said they did not capture the big spending announced by the government to cope with the virus. | The Office for National Statistics, which released those figures, said they did not capture the big spending announced by the government to cope with the virus. |
| "The coronavirus (Covid-19) pandemic is expected to have a significant impact on the UK public sector finances," it added. | "The coronavirus (Covid-19) pandemic is expected to have a significant impact on the UK public sector finances," it added. |
| "These effects will arise from both the introduction of public health measures and from new government policies to support businesses and individuals." | "These effects will arise from both the introduction of public health measures and from new government policies to support businesses and individuals." |
| Tax rises | Tax rises |
| The ONS said the full effects of coronavirus on the public finances would become clearer in the coming months. | The ONS said the full effects of coronavirus on the public finances would become clearer in the coming months. |
| Mr Johnson told the BBC's Today programme that there was still "a huge amount of uncertainty" surrounding the economic impact of the virus. | Mr Johnson told the BBC's Today programme that there was still "a huge amount of uncertainty" surrounding the economic impact of the virus. |
| However, the government had announced tax cuts and spending increases worth £100bn, so the effect was "likely to dwarf the record that we saw during the financial crisis". | However, the government had announced tax cuts and spending increases worth £100bn, so the effect was "likely to dwarf the record that we saw during the financial crisis". |
| Mr Johnson said the economy was unlikely to recover quickly afterwards and would remain "smaller than it otherwise would have been". He added that tax rises and a growing deficit were the likely outcome. | Mr Johnson said the economy was unlikely to recover quickly afterwards and would remain "smaller than it otherwise would have been". He added that tax rises and a growing deficit were the likely outcome. |
| "I would be astonished if in a couple of years the economy was back where it would have been if it [the virus] had never happened," he said. | "I would be astonished if in a couple of years the economy was back where it would have been if it [the virus] had never happened," he said. |
| Raising money | Raising money |
| In another development, the Treasury has announced that it is speeding up its plans to raise money in order to cover the cost of its coronavirus measures. | |
| It will now be issuing £180bn worth of government bonds, known as gilts, in the May-to-July period, more than originally intended in those months. | It will now be issuing £180bn worth of government bonds, known as gilts, in the May-to-July period, more than originally intended in those months. |
| "The temporary and immediate nature of the unprecedented support announced for people and businesses means the government expects that a significantly higher proportion of total gilt sales in 2020-21 will take place in the first four months of the financial year, in order to meet the immediate financing needs resulting from Covid-19," the Treasury said. | "The temporary and immediate nature of the unprecedented support announced for people and businesses means the government expects that a significantly higher proportion of total gilt sales in 2020-21 will take place in the first four months of the financial year, in order to meet the immediate financing needs resulting from Covid-19," the Treasury said. |
| "This higher volume of issuance is not expected to be required across the remainder of the financial year." | "This higher volume of issuance is not expected to be required across the remainder of the financial year." |