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ONE MONTH!

By Pete Moore On May 22nd, 2020

Government borrowing surged to £62bn in April, the highest monthly figure on record, after heavy spending to ease the coronavirus crisis.

It means the deficit – the difference between spending and tax income – was larger last month than forecast for the whole year at the time of the Budget.

Government borrowing for April alone was £62 billion. All government borrowing is simply deferred taxation. We and the young will be paying this back for decades. And all the because the NHS is crap.

Anyone who thinks that they saw austerity after Gordon Brown’s mega-recession is in for a surprise. Anyone who thinks that the epidemic has meant a nice couple of months in the garden is really in for a surprise.

The economic effects of the Wuhan Flu on our pockets, our jobs and our standard of living will long outlast the virus itself. In the end the hit on our standard of living will kill many more than the virus did.

One Response to “ONE MONTH!”

  1. All government borrowing is simply deferred taxation.

    But not if the Bank of England buys some of the new debt and the market buys the rest at a negative interest rate, as has happened this week. And the Bank has now made clear that negative base rates are on the cards. Watch out if you have money on deposit, you could soon be charged for it:

    “The Bank of England governor, Andrew Bailey, has paved the way for negative interest rates in a dramatic move that illustrates concerns inside the central bank that the impact of the coronavirus lockdown will be longer and deeper than expected. Bailey said central bank officials were actively considering all options to help see the economy through a deep recession and told MPs that it would be “foolish” to rule out cutting the cost of borrowing to below zero.

    The move came after Britain sold a government bond with a negative yield for the first time. A negative yield effectively means investors have to pay to lend money to fund the government’s response to the Covid-19 pandemic. In searching for a safe haven for their money they bought gilts knowing they would get back less than they paid for them when the bonds mature in three years’ time. The £3.8bn gilt auction by the debt management office (DMO) sold three-year government bonds with a yield, which indicates the interest paid, of -0.003%…”

    https://www.theguardian.com/business/2020/may/20/uk-sells-government-bond-with-negative-yield-for-first-time-coronavirus