The United Kingdom public debt has risen beyond the country’s economy for the first time since 1963, after the government borrowed a record £55bn in May.
Checkout Magazine learnt the total level of debt skyrocketed by £173bn over the last year to reach £1.95tn, or 100.9% of GDP, as ministers introduced unprecedented support for businesses and households during the coronavirus crisis.
The chancellor, Rishi Sunak, said, “Today’s figures confirm that coronavirus is having a severe impact on our public finances. The best way to restore our public finances to a more sustainable footing is to safely reopen our economy so people can return to work.
“We’ve set out our plan to do this in a gradual and safe fashion, including reopening high streets across the country this week, as we kickstart our economic recovery.”
The UK joined Italy, the US and Japan in the club of nations with levels of borrowing higher than their national income as the latest Office for National Statistics figures showed the UK government borrowed £55.2bn in May, roughly nine times more than the same month last year and the highest monthly borrowing since comparable records began in 1993.
Debt levels are expected to continue rising for the rest of the year, pushing the debt-to-GDP ratio nearer to 105% and more likely towards 110%, according to some City forecasts.
The UK economy has begun to bounce back from the depths of the lockdown in April and May, but the recovery is expected to be long and slow, as exporters wait for foreign markets to open and the worst-hit high street businesses cope with heavy restrictions on the number of customers they can serve.
In May the government announced it would need to borrow an extra £225bn to get through the summer months while the economy remained weak.
134 total views, 1 views today