Kate Andrews Kate Andrews

Will Covid cost less than expected?

It’s no surprise that the bill for Covid-19 keeps racking up. The Office for Budget Responsibility’s latest forecast predicts borrowing will reach £355 billion for the financial year: decisions to extend furlough, boosting public sector spending and supporting businesses that have been closed for months at a time all come with a price tag attached.

But that doesn’t stop the sums from creating shock and awe each time they’re announced. Today’s update from the Office for National Statistics shows that government borrowing hit £19 billion last month — more than £17 billion from the previous year and the highest borrowing recorded for February since records began in 1993. 

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Source: ONS. The substantial increases in borrowing in recent months reflect the emerging effects of government coronavirus policies. Public sector net borrowing excluding public sector banks, UK, the current financial year-to-date (April 2020 to February 2021) compared with the financial year ending March 2020 (April 2019 to March 2020)

Operating on the assumption that borrowing this year was going to be off the charts — something akin to wartime spending — there are some positives to take away from today’s update.

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