British borrowing continues its historic path
The government reduces its stake in Natwest Bank
Saturday – 7 Shaaban 1442 AH – 20 March 2021 AD Issue No. [
The British budget deficit rose to its highest level since the start of data recording in 1993 (Reuters)
London: “Asharq Al-Awsat”
On Friday, official data revealed that the British government borrowed 19.1 billion pounds last month, less than the expectation in a Reuters poll to borrow 21 billion pounds (29.2 billion dollars) … But this level increases by 17.6 billion pounds. On the same month of last year, according to the data of the National Bureau of Statistics … and that is the highest level in such a month of any year since the start of data recording.
This brings borrowing in the first 11 months of the fiscal year to nearly 279 billion pounds, an increase of 228.2 billion pounds over the parallel period of 2020, a record unprecedented … while the British Budget Responsibility Office expects the arrival of public borrowing until the end of March ( March) to 354.7 billion pounds.
And official data revealed last week, that Britain’s economy contracted by 2.9 percent in January compared with December, a less severe pace than expected. As the country entered again into general isolation measures aimed at combating the spread of the Corona virus. Economists polled by “Reuters” had expected a contraction of 4.9 percent.
The Bank of England said last month that the country’s economy would likely contract 4 percent in the first quarter of 2021; This is mostly due to the most recent lockdown, but also due to disruptions caused by new, post-break away rules for trade with the European Union.
“The economy took a clear hit in January, albeit less than some expected, with retail stores, restaurants, schools and hairdressers affected by the latest shutdown,” said Jonathan Atho, an official in the Office for National Statistics. Manufacturing also saw its first decline since April, as auto manufacturing fell dramatically. But increases in health services as a result of vaccine deployment and an acceleration of testing partially offset the declines in other industries.
Britain’s economy shrank 1.7 percent in the three months to January, better than the average forecast of a 2.5 percent contraction in a Reuters poll. The statistics office said the economy is 9.2 percent lower than it was in January of last year.
In an independent context, the British government reduced its stake in Natwest Bank by selling shares of 1.1 billion pounds bought by the same banking group, the British government and the bank announced Friday.
The process involved about 591 million shares, a large part of which will be canceled, according to two statements of the government and the banking group. Thus, the state’s contribution to the bank’s capital decreased from 61.7 per cent to 59.8 per cent. Natwest is one of the largest banks in the United Kingdom.