The government plans to borrow £225bn from bond market investors in just four months to fund the huge increase in public spending during the coronavirus pandemic. In an early indicator of the soaring financial costs of the crisis, the Treasury said its debt management office – which sells bonds to finance the government’s spending requirements – would offer investors £180bn worth of gilts to buy between May and July, on top of £45bn already planned for April. Taken together the borrowing requirement in the first four months of the new year comes close to the annual peak in gilt sales recorded during the financial crisis, when Britain sold £227.6bn of bonds in 2009-10. Before the coronavirus struck, the government had planned to sell about £160bn worth of bonds in 2020-21 to fund its expenditure and service its debts. The Treasury said it expected the bulk of gilt sales this year to come in the four months to July, given the “immediate financing needs resulting from Covid-19”, and that it hoped higher levels of bond issuance were not required for the remainder of the financial year. The government’s gilt sales to City investors and overseas asset managers are typically higher than the budget deficit – the annual shortfall between public spending and income from tax receipts – as it includes raising money to refinance existing government bonds. However, the vast increase in gilt sales suggests that borrowing is expected to balloon, as the state pays workers’ wages and as more people claim unemployment benefits. The government’s independent economics forecaster, the Office for Budget Responsibility, has said that Britain’s budget deficit could rise to £273bn this year if lockdown measures are maintained for three months, more than £200bn higher than previously expected. Figures published earlier on Thursday showed Britain borrowed £48.7bn last year, around £1.3bn more than expected, indicating that the government finances were already deteriorating before the coronavirus struck. The Office for National Statistics said the budget deficit had increased by £9.3bn compared with 2018-19, as public spending increased by more than tax receipts, including on the government’s financial settlement to boost NHS funding. Although the deficit had steadily fallen since a peak of almost £160bn during the financial crisis a decade ago, the ONS warned that the increase last year was the largest annual rise since that point. Thomas Pugh, UK economist at the consultancy Capital Economics, said the plan to ramp up gilt sales was the first concrete sign of higher borrowing emerging amid the coronavirus crisis. “The government measures to combat the economic fallout of the coronavirus at the same time as revenues are hit by the huge contraction in economic output is a double whammy for the public finances,” he added.