Public Sector Debt Soars To GBP799 Billion

Wed, 22 Jul 2009

New figures have revealed that government borrowing hit £13bn last month to take overall net debt to its highest proportion of UK output since records began in 1974.

Last month’s figure of £13bn – nearly double the amount reported for June 2008 - means the nation's debt has soared to £799bn, equal to a record 56.6 per cent of (GDP), according to the Office for National Statistics (ONS).

The ONS data showed how the economic recession is hitting tax receipts, with corporation tax takings falling by 14.1 per cent, VAT by 15.9 per cent and income tax by 3.9 per cent.

But there was yet another rise in public spending last month, with social benefit expenditure up 9.7 per cent to £13.3bn as the more people claimed unemployment benefit .

Total government outlay over June hit £49bn, up from £44.2bn a year earlier, while total receipts fell 5.7 per cent to £35.5bn.

The figures from the ONS further highlight fears over Britain's public finances with concerns over borrowing levels mounting.

Earlier this year, Chancellor Alistair Darling forecast net borrowing over the year as a whole will hit £175 billion, although economists fear a figure of £190 billion is more likely as the government seeks to spend its way out of recession.
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