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The pandemic saw a dramatic rise of the British public borrowing due to many socio-economic reasons that could not unfortunately be neglected. However, fast forward today, and we see that the past 8-months of the year have come to a gradual decrease in the outlet usage of loans and other borrowing fallback systems. Additionally, from a governmental perspective, the spending from the UK treasury was initially deepened, as Rishi Sunak sought to provide support to those that were directly laid off due to the pandemic via the Furlough programme.
While many saw to cut back their spending on all accounts through the pandemic, video gaming and iGaming became an all-time high, due to many obviously spending more time at home of course. Bet and Skill being one of the many great platforms to provide iGaming related resources, saw great increase in their traffic and usage basis, especially due to their provision of btts and win predictions across sports that they catered to.
What are the trends of borrowing within 2021?
Borrowing between the period of April and November saw a steady decline, going from an all-time high of 136 billion pounds, to 116 billion within the fall period and fourth quarter of the business year. This data was presented by the Office for National Statistics. However, the figures for borrowing in the UK were almost three times higher during the year of 2020, due to a more aggressive lockdown, which saw many businesses close their doors for at least 3 months at the time, to try and flatten the curve. The pressure came from high levels of Covid cases which saw huge pressure and demand on the NHS and hospitalisations.
With new rules being introduced for the month of December within the UK, it is believed that Sunak was hugely against the idea of tighter restrictions and social distancing rules, however Boris Johnson was firm on not changing his projections-even not on the account of how that could affect spending for the next months to come.
While the economy has gotten much more flexible with time, when it comes to coping with restrictions, for each new wave and strain of the virus, many suspect that this will only deteriorate the public’s ability to contribute to public finances, and tax revenues. Additionally, further reintroduction of compensation schemes would deplete an already low treasury, which has in recent times managed to recover due to the overall lower net borrowing within the past months.
The current budget deficit that the UK has managed to rack up due to the pandemic, is at an all-time low-the first time ever since the end of the second Great World War. This in financial terms is equivalent to 15% of gross domestic product-and that is just for the 2020/2021 financial year. No matter how low public borrowing has fallen, introducing another Furlough scheme, as imminent as it would seem, should another lockdown fall into place, would prevent tax revenues from picking up again, at a time when it is very needed.
Data that came in just recently prior to the moment where many businesses are paying their tax returns, saw an increase of 15% in receipts from just the April to November period. With inflation adding to the woes of many now, that is another worry and woe of the government. The UK the government saw an inflation jump of almost 54%, equating to 43 billion pounds.
The public sector net debt hit a total of 2.318 trillion pounds, which was equivalent to 96.1% of gross domestic product. This has gone up 500 billion pounds directly due to borrowing and spending within the pandemic.
