UK faces highest peacetime deficit of 270 billion as Rishi Sunak prepares budget

Britain is facing the largest deficit in peacetime and pressure is building on the chancellor to add to it by extending pandemic support programs including furlough payments that are due to expire over the coming weeks

UK government borrowing climbed to 270.6 billion pounds ($378 billion) in the first 10 months of the fiscal year, highlighting the challenge facing Chancellor of the Exchequer Rishi Sunak to return the public finances to a sustainable path.

Rishi Sunak, UK chancellor of the exchequer to announce special package to help businesses. (Bloomberg)

The figures are the last snapshot before Sunak announces his budget on March 3. Britain is facing the largest deficit in peacetime and pressure is building on the chancellor to add to it by extending pandemic support programs including furlough payments that are due to expire over the coming weeks.

The budget deficit stood at 8.8 billion pounds in January, a month that normally generates a surplus as payments of self-assessed income tax, corporate tax and Christmas sales taxes pour into the Treasury. It was the first January shortfall for 10 years.