The United Kingdom’s economy is crumbling under the strain of the coronavirus lockdown and government borrowing is soaring to the highest levels in peacetime history, increasing pressure on the government to set out an exit strategy.
“We are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries,” Bank of England interest-rate setter Jan Vlieghe said.
The IHS Markit/CIPS Flash UK Composite Purchasing Managers’ Index (PMI) fell to a new record low of 12.9 from 36.0 in March – not even close to the weakest forecast in a Reuters poll of economists that had pointed to a reading of 31.4.
The United Kingdom will issue 180 billion pounds ($222 billion) of government debt between May and July, more than it had previously planned for the entire financial year.
The country’s debt mountain exceeds $2.5 trillion and its public sector net borrowing could reach 14% of gross domestic product this year, the biggest single year deficit since World War Two.
