Coronavirus: Treasury trebles monthly borrowing plans for virus

Rishi Sunak
Image caption Rishi Sunak has announced several measures designed to support the economy

The Treasury has trebled its Budget plans to raise cash from markets in April as part of an "exceptional revision" to fund interventions to support the economy through the pandemic.

The Debt Management Office, which raises cash for the Treasury, announced it would seek to raise £45bn in April - record cash issuance of UK government bonds, known as gilts - compared with an anticipated figure of £16bn at the time of the Budget earlier this month.

The government will now be raising money by auctioning its gilts 18 times in April, a significant increase.

The chancellor has already made clear that the biggest single support scheme - the Coronavirus Job Retention Scheme - will start to pay out at the end of April. The government has also delayed various taxes that would normally have been paid by businesses.

Former Bank of England deputy governor and member of the Office for Budget Responsibility Sir Charles Bean has said that the government's borrowing could be on course for the same level as during the financial crisis, particularly if take up of the job scheme is higher or it is needed for longer.

"Together with the costs of the measures, the budget deficit could easily top £200bn this year according to the Institute for Fiscal Studies. That is nearly 10% of GDP, the same level reached in the Great Recession," Sir Charles wrote on Monday.

Unusually for an economist who spent 13 years on the Bank's Monetary Policy Committee, Sir Charles said that in these emergency circumstances it would be "entirely appropriate for the Bank of England to help out by buying some of the [government debt] - directly from the government in the primary market, should that prove necessary".

The Bank is keeping that option under review for now, but has started buying £200bn of bonds on financial markets as part of its programme of "asset purchases" also known as "quantitative easing" which restarted earlier this month.

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