UK Government debt tops £2 trillion for the first time

UK Government debt has surpassed £2 trillion for the first time, the Office for Budget Responsibility (OBR) saidon Friday.

That roughly 100.5% of the UK’s economic output, the highest since 1961.

The UK’s borrowing over the first four months of the financial year reached £150.5 billion — almost three times the borrowing by the government during the previous financial year as a whole.

The OBR said UK central government spending so far in 2020-21 is 36% higher than a year earlier “reflecting the cost of the coronavirus job retention and self-employment income support schemes, plus additional grants to local authorities and higher public services spending.”

HMRC cash receipts over the first four months of 2020-21 were 31% lower than a year earlier, with VAT accounting for the bulk of the deterioration thanks to the Government’s deferral scheme — which ended on 30 June — and lower consumer spending. 

UK finance minister Rishi Sunak said: “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.

“It is also why we are taking action now to support the growth and jobs which pay for our public services.”