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MNI DATA IMPACT: UK Debt/GDP Ratio At 60-Year High

YTD Borrowing Sharply Lower Than Initial Estimates

LONDON (MNI)

UK government borrowing rose by less than expected in August, and year-to-date borrowing was revised lower, but that failed to prevent overall debt levels rising further to its highest level since 1961, data released Friday by the Office for National Statistics showed.

Borrowing rose to GBP35.920 last month, nearly seven times higher than borrowing in the same month of 2019, but fell short of the updated OBR forecast GBP44.4 billion.

That lifted the debt-to-GDP ratio to 101.9%, the highest since March of 1961. Despite hefty revisions to earlier borrowing data, the sharp decline in GDP has contributed to the continual rise in the debt ratio from 85.9% in February.

July borrowing fell to GBP15.441 billion -- the lowest since April -- from the initially-reported GBP26.669 billion. Much of the downgrade stems from a GBP6.5 billion decline in the government's purchase of goods and services. However, that revision is likely to be spread across the financial year in later iterations of borrowing data. July receipts were revised higher by GBP2.4 billion.

The July revision extends a trend of significant downward revisions in borrowing data, leaving April-July borrowing GBP12.7 billion below the level reported last month.

Borrowing over the year to date rose to GBP173.7 billion, compared to GBP55.8 billion during the entirety of the 2019/20 fiscal year. July-to-August borrowing exceeds the GBP157.7 billion borrowed over the 2009/10 fiscal year, at the height of the financial crisis.

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