UK Government debt reaches £2tn

UK Government debt has reached over £2 trillion for the first time.

UK Government debt reaches £2tn

At the end of last month, the UK’s debt was £2.004tn, £227.6bn more than at the same point last year, according to the latest figures released by the Office for National Statistics (ONS).

The rise on debt means the UK Government now owes more than the entire value of the UK’s economy for the first time in 60 years.

Economists said the scale of the debt reflected the scale of its efforts to tackle the economic fallout of the coronavirus pandemic and warned that it would get worse before it got better.

The UK Government now owes the equivalent of 100.5% of gross domestic product (GDP) - the total value of all the goods and services produced in the economy, BBC News reports.

The ONS said that it is the first time debt has been above 100% of GDP since the 1960-61 financial year.

The UK Government borrowed £26.7bn in July, a decline from a revised £29.5bn in June, as COVID-19 took its toll on the public finances.

The July figure was the fourth highest borrowing in any month since records began in 1993. The three higher figures were the previous three months.

Ruth Gregory, senior UK economist at Capital Economics, said: “The £26.7bn the government borrowed in July was the lowest monthly borrowing figure since March as fiscal support started to unwind. Nonetheless, it is another huge sum and pushes borrowing in the year to date to £150.5bn.

“That is close to the deficit for the whole of 2009-10 of £158.3bn, which was previously the largest cash deficit in history, reflecting the extraordinary fiscal support the government has put in place to see the economy through the crisis.”

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