UK government borrowing could hit £300bn this year as tax receipts collapse and the Treasury pumps money into the economy to tackle the fallout from coronavirus, according to a new report. The £300bn figure, produced today by the Centre for Policy Studies (CPS) think tank, would be by far the biggest budget deficit since World War II and is even higher than an estimate made last week by the Office for Budget Responsibility (OBR). The CPS’s updated forecasts included estimates from other organisations in places where the OBR did not attach numbers to schemes, as well as newly announced spending. Since the coronavirus outbreak began in earnest in Britain in March, the government has rolled out numerous schemes to limit the collapse in the economy. The OBR, the UK’s official budget forecaster, last week said the cost to the exchequer could be £271bn in the 2020-21 financial year. The centre-right CPS think tank today produced a more up-to-date assessment, saying the total could be £301bn. It said the cost of the support schemes themselves could add £127bn on to borrowing, with £119bn lost due to lower tax receipts and higher welfare payments.
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