by William Schomberg and Andy Bruce
LONDON, April 26 (Reuters) – The British government borrowed nearly 20% more than expected in the 2021-2022 budget year, which ended at the end of March, official figures showed on Tuesday, and the authorities noted their borrowing forecasts for the current fiscal year.
These announcements illustrate the difficulties facing the Minister of Finance, Rishi Sunak, pressed from all sides to increase aid to households and businesses to counter the surge in prices but who shows his desire to redress public finances deteriorated by the COVID-19 crisis.
Rishi Sunak assured Tuesday that he was determined to help the British to cope with the increase in the cost of living while reaffirming his desire to contain the public debt, which reached at the end of March 2,343.8 billion pounds (2.792 billion euros). euros), or 96.2% of gross domestic product (GDP).
Net borrowing by the public sector (excluding state-owned banks) reached £151.8bn across the whole of the 2021-22 budget year as last month the Office for Budget Responsibility, the public body responsible for budget forecasts, said it was counting on an annual amount of 127.8 billion.
“The deficit is expected to start falling at a slower pace as inflation drives up interest on debt while fiscal support for households increases,” commented Martin Beck, economic adviser at EY ITEM Club.
The rise in prices translates into an increase in the service of the public debt, of which around a quarter has been issued at rates linked to inflation. Over 2021-2022, the total amount of interest paid by the State to its creditors has thus jumped by nearly 80% to reach almost 70 billion pounds.
The government has increased the projected amount of borrowing for the 2022-2023 financial year to almost 162 billion pounds, almost 14 billion more than previously planned.
(Report William Schomberg and Andy Bruce, French version Marc Angrand, edited by Matthieu Protard)