British public debt tops two trillion pounds for first time By Reuters

British public debt tops two trillion pounds for first time


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© Reuters. FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak visits Peak Scientific, a Scottish manufacturer of gas generators for analytical laboratories in Glasgow

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LONDON (Reuters) – Britain’s public debt went above 2 trillion pounds ($2.65 trillion) for the first time in July as the government ramped up public spending to cope with the coronavirus pandemic and tax revenues fell, official data showed on Friday.

Net debt, excluding public banks, rose to 2.004 trillion pounds ($2.66 trillion), up by nearly 230 billion pounds from July 2019 and equivalent to 100.5% of Britain’s economic output, its highest since 1961.

Borrowing in the April-July period, the first four months of the financial year, surged to 150.5 billion pounds, almost three times borrowing by the government during the previous financial year as a whole, the Office for National Statistics said.

In July alone, borrowing excluding public sector banks was 26.7 billion pounds, slightly less than the median forecast in a Reuters poll of economists. But in July last year, the budget was in surplus by about 1.6 billion pounds, boosted by receipts of income tax which typically fall in the month.

“Today’s figures are a stark reminder that we must return our public finances to a sustainable footing over time, which will require taking difficult decisions,” finance minister Rishi Sunak said.

Debt as a share of gross domestic product was also pushed up by the sharp contraction in the size of Britain’s economy during the coronavirus lockdown, the ONS said.

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