The Office for National Statistics said although the impact of the pandemic on the public finances is becoming clearer, its effects are not fully captured in this data
European markets were mixed on Tuesday morning after UK public sector borrowing showed the government had leveraged another £24bn ($33.4bn) in May.
Despite the hefty figure, the Office for National Statistics (ONS) said pace of borrowing appears to be slowing, following spending to manage the coronavirus. Last year’s total was revised downward.
At the end of May 2021, public sector net debt (excluding public sector banks, PSND ex) was £2.2tn or around 99.2% of GDP, the highest ratio since the 99.5% recorded in March 1962.
The ONS said although the impact of the pandemic on the public finances is becoming clearer, its effects are not fully captured in this data, meaning that estimates of accrued tax receipts and borrowing are subject to greater uncertainty than usual.
The FTSE 100 rose 0.3% at opening. The CAC gained 0.1% and Germany’s DAX dropped 0.1%.
As we emerge from the pandemic, we are continuing to support people and businesses to get back on their feet and our Plan for Jobs is working, said chancellor Rishi Sunak.
It’s also important over the medium term to get the public finances on a sustainable footing. That’s why at the budget in March I set out the difficult but necessary steps we are taking to keep debt under control in the years to come, he said.
Meanwhile, supermarket chain Morrisons’ share price retreated slightly after dropping more than 30% yesterday. By 8.30am in London it was down 0.5%.
Over the weekend news broke that private equity house CD&R had put in an unsolicited offer for the chain, which was rebuffed because Morrisons said it “significantly” undervalued the firm. Reports on Monday compounded rumours that CD&R was likely to make another bid before its deadline under takeover rules in July.