The United Kingdom’s debt has reached a staggering 100% of its annual output, a level not seen since the early 1960s, according to the Office for National Statistics.
“Public sector net debt… was provisionally estimated at 100 percent of gross domestic product at the end of August,” the ONS said in a release.
This news comes as the new government, led by Prime Minister Keir Starmer, prepares to unveil its maiden budget on October 30. Starmer has warned that the budget will be “painful,” with tax rises and spending cuts expected.
Finance Minister Rachel Reeves will deliver the country’s fiscal plans to parliament at the end of next month.
The government is already facing criticism from all sides over its decision to scrap the winter fuel-benefit scheme, which benefited 10 million pensioners. Starmer has repeatedly defended the move as a necessary “tough choice” to help fill a £22-billion “black hole” in public finances left by the previous Conservative administration.
Friday’s data also showed “the highest August borrowing on record, outside the (Covid) pandemic,” Darren Jones, a senior official at the UK Treasury, said in a statement.
“Debt is 100 percent of GDP, the highest level since the 1960s. Because of the £22 billion black hole in our public finances we have inherited this year alone, we are now taking the tough decisions now to fix the foundations of our economy,” he added.
Looking ahead, a government watchdog last week forecast that UK state debt could almost treble over the next 50 years owing to an ageing population and climate change. The projection came from the Office for Budget Responsibility, which the government relies on for UK growth and inflation predictions.
