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Public debt: The government said it would have liked to outline spending plans for the rest of the current parliament, as it had originally intended.

But a statement on the U-turn said the chancellor and prime minister had decided on a more targeted approach given the renewed threat from the pandemic, which has forced tougher restrictions on large swathes of the country and sparked bitter rows with local leaders over levels of government support.

The Treasury pledged to “continue to show flexibility and creativity in our response”, saying the review was expected to conclude at the end of next month.

The review, it added, would set departments’ resource and capital budgets for 2021-22 and the block grants for the devolved administrations over the same period as the pandemic places unprecedented peacetime demands on the public finances.

Figures from the Office for National Statistics (ONS) showed national debt had hit a new record of £2.06trn in September as the government continued to borrow big to fund its COVID-19 response, public debt.

The ONS said the sum represented the highest debt to GDP ratio – that is debt verses the size of the economy – since 1960.

It is climbing because government tax receipts are falling at a time when its spending is through the roof.

The ONS said £36.1bn was borrowed in September – £28.4bn more than in the same month last year.

It took total borrowing over the first six months of the financial year to £208.5bn.

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