Public Debt Soars To Record Level

Fri, 19 Jun 2009

Government borrowing has soared to the highest level in over 15 years, reaching £19.9bn in May, according to new figures.

The Office for National Statistics (ONS) revealed that public sector net borrowing now stands at £30.5 billion for the current financial year so far - more than double the level (£12.2bn) seen at the same stage a year ago and even higher than the £19bn borrowed in March.

Total outstanding government debt has increased to a mammoth £774.8 billion – almost £150 billion higher than a year ago and equivalent to 54.7 per cent of UK Gross Domestic Product (GDP) - the biggest proportion for more than 30 years.

In April's budget, Chancellor Alistair Darling estimated that net borrowing for the whole of 2009 would hit £175 billion as tax revenues such as VAT and corporation tax decrease and spending on unemployment benefit soars.

According to the ONS figures, government spending on social benefits in May rose 8 per cent, or £1bn, to £13.5bn as unemployment figures increased sharply to a 12-year high of 2.26 million.

Total government outlay over May jumped 16 per cent to £50.6 billion, while tax receipts shrank 1 per cent to £30.6 billion.

Last month, credit rating agency Standard and Poor’s (S&P) warned that spiralling UK public debt levels had forced it to revise its outlook for the UK from ‘stable’ to ‘negative’.
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