Bad news for the new government of Prime Minister Keir Starmer: the UK’s national debt has reached the level of economic output for the first time in decades. The reasons for this are varied, but well known…
Public sector debt totalled 100 percent of gross domestic product in August, the Office for National Statistics reported in London on Friday, the highest level since monthly records began in 1993.
In July, it was 99.3 percent. Bank of England data shows that the debt burden last regularly reached this level in the early 1960s, when Britain was still struggling with the financial consequences of World War II.
Debts have risen rapidly since the financial crisis
Government debt rose sharply during the global financial crisis that began in 2007/2008 and then again during the coronavirus pandemic. At the same time, the economy is slowing, not least because of the exit from the EU.
This will make it even harder for new Chancellor of the Exchequer Rachel Reeves to draw up her first budget, especially as new debt rises. The government took on almost £14 billion (€16.68 billion) of debt in August, more than £3 billion more than a year earlier. Spending on welfare payments rose accordingly.
Reeves wants to avoid increases in income, business and VAT rates, which leaves little room for improving public services and encouraging investment.
Economists see “difficult budget situation”
“The August government finance figures underline the difficult fiscal situation the Chancellor faces ahead of her first budget,” said economist Gora Suri of consultancy PwC. During the election campaign, Prime Minister Starmer targeted annual economic growth of 2.5 percent. The Bank of England expects growth of only around 1.25 percent this year.
Starmer’s Labour Party won a landslide victory in the July 4 general election, ousting the Conservatives after 14 years in power.
Source: Krone

I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.