Support 100 years of independent journalism.

  1. Science & Tech
  2. Coronavirus
14 May 2020updated 04 Sep 2021 12:29pm

UK budget deficit to reach highest level since 1945, OBR says

By Michael Goodier

The UK’s budget deficit is set to reach levels not seen since the end of the Second World War, according to a new scenario put forward by the Office for Budget Responsibility (OBR)

The group’s modelling suggests that net borrowing, commonly known as the budget deficit, will reach £294.8bn in 2020-21, or 15.2 per cent of GDP.

The figure is more than five times the budget deficit predicted before the UK entered lockdown. It is also higher than what the OBR forecasted last month, when it suggested net borrowing could reach 13.9 per cent of GDP.

At the peak of the financial crisis, the UK’s budget deficit reached 10.2 per cent of GDP.

The OBR also estimates the government’s grant scheme for furloughed workers, called the Coronavirus Job Retention Scheme, will cost the Treasury £56bn in gross spending, up from the £42bn forecast last month.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy

Lastly, its scenario said the national debt would reach 95.8 per cent of GDP, the highest since 1963. That was revised up slightly from 94.6 per cent predicted last month.

Content from our partners
The great climate collaboration
A healthy conversation, a healthy career
A sustainable solution for inhalers