British public debt tops £2t for first time

[LONDON] Britain's public debt went above £2 trillion (S$4.79 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, up by nearly £230 billion from July 2019 and equivalent to 100.5 per cent 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, almost three times borrowing by the government during the previous financial year as a whole, the Office for National Statistics (ONS) said.

In July alone, borrowing excluding public sector banks was £26.7 billion, 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, 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.

REUTERS