22 Jan 2021
UK public sector net borrowing reached £34.1bn in December, the highest figure for the month on record.
In addition, it is also the third-highest borrowing amount in any month since records started in 1993, according to the Office for National Statistics (ONS).
BBC reports borrowing for the financial year has now hit £270.8bn, £212.7bn more than last year, the ONS added.
According to the independent Office for Budget Responsibility (OBR) predicts that borrowing could hit £393.5bn by the end of the financial year in March.
The rise in borrowing has resulted in a sharp increase in the national debt, which currently stands at £2.13 trillion.
Britain’s overall debt has now hit 99.4% of GDP - a level not seen since the early 1960s.
Chancellor Rishi Sunak said of the figures: "Since the start of the pandemic we've invested over £280bn to protect jobs and livelihoods across the UK, and support our economy and public services.
"This has clearly been the fiscally responsible thing to do. But, as I've said before, once our economy begins to recover, we should look to return the public finances to a more sustainable footing."
However, Samuel Tombs, chief UK economist at Pantheon Macroeconomics commented: "The timing of the next general election in 2024 suggests that Mr Sunak will not wait until the economy has fully recovered before actively tightening fiscal policy.
"Accordingly, we expect taxes to rise sharply in 2022, in order to attempt to stabilise the debt-to-GDP ratio, while at the same time funding big demography-linked increases in health and pensions spending."
Furthermore, some MPs have cautioned that certain local authorities are taking on too much debt.
Meg Hillier, chairwoman of the Commons public accounts committee said the Treasury was showing a "worryingly laissez faire attitude" to the problem.
She said that "some local authorities have taken on extremely risky levels of debt in recent years in an effort to shore up dwindling finances", especially in commercial property investments.
"The pandemic has doubly exposed that risk - in the huge extra demands and duties it is placing on local authorities, and in the hit to returns on commercial investments," the MP added.