UK finance minister Rishi Sunak, battling record deficits and soaring debt due to his government’s emergency coronavirus response, faces a politically dangerous balancing act to pay the bill, analysts say.
As the outbreak raged, total public debt rocketed above £2.0 trillion for the first time, striking a record high proportion of 102 percent of gross domestic product (GDP).
Commentators argue that a combination of taxation, inflation, spending cuts, and even economic growth could help balance the books for Sunak.
But the public purse also faces the additional threat of a potential no-deal Brexit at the end of this year.
Public sector net borrowing — the state’s preferred measure of the deficit — hit a record £173.7 billion in the first five months of its 2020-2021 fiscal year, or April to August.