Treasury considers tax hikes and pay freezes to cover Covid-19 costs

Britain's budget deficit expected to hit 337bn this year after spending surge

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Raising taxes or imposing a public sector wage freeze are among the options on the table to pay for a government borrowing boom during the coronavirus pandemic, according to a leaked Treasury document.

The internal report estimated Britain's budget deficit - the gap between government income and expenditure - is on course to hit 337bn this year after a dramatic increase in public spending to cushion the economic fallout from the disease, while tax income has been eviscerated by lockdown measures.