In the first eight months of the financial year, the government deficit in the United Kingdom reached a record level in peace time of some £ 241 billion. That is approximately EUR 265 billion and shows some of the financial damage caused by the pandemic. The British spent billions on support for businesses and households to get through the crisis.
Experts point out that the economy may fall into recession, which does not make the recovery of the household book any easier. In November alone, the British government spent nearly £32 billion more than it did through taxes.
Figures from the National Statistical Office have shown that the British economy rose sharply in the third quarter. But for the current fourth quarter, a strong contraction is foreseen, also because of the harsh measures being taken to contain the spread of a mutated and highly contagious variant of the coronavirus. On top of that, there is the Brexit, about which the separation talks between the United Kingdom and the European Union are very difficult.
Treasury Secretary Rishi Sunak and the British central bank are under severe pressure to increase the monetary support packages due to multiple risks to the economy. In addition, some economists now foresee that the British economy will also shrink in the first quarter. This had not yet been set out so strongly in the latest forecasts by the policy-makers.