IFS - Response to latest ONS public sector finances data
Isabel Stockton, Research Economist at the Institute for Fiscal Studies responded to the latest ONS public sector finances data
"Today's figures continue the pattern of borrowing in 2021-22 coming in below that seen last year, but significantly above that seen in the same months in any pre-pandemic year. Across April and May 2021 the Government borrowed a total of £53 billion, down from the £91 billion in the same months last year but much higher than the £16 billion borrowing across April and May 2019. So borrowing over the last twelve months continues to fall, but is still running way above what would be sustainable over the medium-term.
"Stronger growth in the economy - and higher inflation - should help bring borrowing down more quickly this year than was forecast in the March Budget. This will bring it below not only last year's record for modern times, but also below the pre-pandemic record share of national income that was seen at the height of the financial crisis in 2009-10. Looking further ahead the path of borrowing will depend on the completeness of the economic recovery, whether the income tax and corporation tax rises announced in the Budget go ahead as planned and - as seems likely - the degree to which this year's Spending Review ends up being more generous than the figures currently penciled in by the Chancellor."
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