March 11, 2020 / 1:38 PM / a month ago

UK's big-spending budget tees up 100 billion pounds more borrowing

LONDON (Reuters) - Britain will borrow almost 100 billion pounds more in coming years than predicted just a few months ago, according to official forecasts that do not yet take into account the likely economic hit from coronavirus.

Chancellor of the Exchequer Rishi Sunak delivered a big-spending budget to parliament on Wednesday, just hours after the Bank of England slashed interest rates.

Figures from the Office for Budget Responsibility (OBR), whose forecasts underpin government fiscal plans, showed cumulative public sector net borrowing from the current 2019/20 financial year through to the end of 2023/24 will total 290.6 billion pounds.

That was up from the OBR’s previous forecast of 194.1 billion pounds published in December.

“The Chancellor has announced the largest sustained fiscal loosening since Norman Lamont’s pre-election Budget in 1992,” the OBR said.

To finance the spending splurge, Britain said it plans to issue 156.1 billion pounds of government bonds in the upcoming 2020/21 financial year, less than forecast by primary dealers but still the most since 2012/13.

British government bond prices rose slightly after the issuance plan was published by the Debt Management Office.

Reporting by Andy Bruce, editing by William Schomberg and Andrew MacAskill

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