Deficits in February hit higher as UK public finances worsened

Public sector borrowing hit a new high in February, with the UK government borrowing £ 19.1 billion ($ 26.6 billion) last month, as spending on measures amid COVID-19 pandemics continued while tax receipts fell.

Monthly borrowing in February reached its highest point since records began in 1993. Recent spending rises have pushed the national debt sharply, with public sector net debt standing at 97.5% of the year. gross domestic product – the highest levels since the early 1960s.

Central government agencies spent around £ 72.6 billion on day-to-day business last month, including £ 3.9 billion linked to government work support programs amid the pandemic, according to data published by Office for National Statistics (ONS) on Friday. Expenditure in February was £ 14.2 billion more than in the same month in 2020.

As spending was confirmed, tax receipts fell by around £ 1.5 billion from February 2020, and central government tax receipts are estimated at £ 46.2 billion last month. Significant tax reductions came from VAT, industry rates, and fuel duty, which were affected by lock-in measures, the ONS said.

Read also: The Bank of England will not make any changes and says there will be no tightening until ‘major progress’ is made

Loans in this financial year are now at £ 278.8 billion, about five times more than in the same period a year ago, with official forecasts suggesting this figure could reach £ 327.4 billion by the end of the current month.

News of the deteriorating public finances came on an already down trading day. The FTSE 100 UKX,
London ‘s major stock index fell in line with market capitalization, more than 1%, according to many major European indices.

“European stock markets have been driven by the sharp recessions seen in the US last night,” said David Madden, an analyst at CMC Markets. “The bearish movements on Wall Street have been driven by higher bond yields and that has poured into today’s European session, even though things have cooled slightly in terms of yield.”

Yield on US Treasury Department 10-year benchmark TMUBMUSD10Y,
kept below 1.7% for much of the day, but spun to 1.72% after the Federal Reserve said it would not extend bank capital rate exemptions established during the pandemic.

Plus: European stocks fall as inflation and oil demand measure markets

Oil stocks, mining and banking took the plunge in London.

Crude prices are down from a sharp fall late on Thursday, as “the prospect of oil heading into Europe is currently at rock level,” according to Axi analyst Stephen Innes. The benchmark price of Brent crude BRN00,
moving around the $ 63.30 per barrel mark, down about 7% from above $ 68 a barrel on Thursday.

“Still, as the vaccine continues its worldwide journey, with major European countries starting to use the AstraZeneca dose, a steady recovery in global demand is expected at some point. soon, ”said Han Tan, an analyst at FXTM.

Read this: EU regulator calls AstraZeneca vaccine ‘safe’ after blood clot examination

Shares in major London-based oil companies BP BP,
and Royal Dutch Shell RDSA,
down, joining the chorus of commodity stock boots with the Rio Tinto RIO miners,
Anglo-American AAL,
Glencore GLEN,
Antofagasta ANTO,
and Fresnillo FRES,

Barclays BARC banking products,
Lloyds LLOY,
and Standard Registered STAN,
also fell.

Resolves around 1% higher, NatWest NWG,
stood out among British banking stock. The increase came when the UK government announced that it had sold £ 1.1 billion worth of NatWest shares back to the bank, representing around 5% of the total shares issued. The sale cuts the government’s share to less than 60%.