Public borrowing soars to £20bn

| June 18, 2009 | 0 Comments

The Office for National Statistics (ONS) has today revealed that UK public sector borrowing has soared to the highest level since ONS records began over 15 years ago.

Public sector net borrowing reached a record level of £19.9 billion in May and has already hit £30.5 billion for this financial year - more than double the level seen at this juncture a year ago.

Total outstanding Government debt has soared to £774.8 billion - £150 billion more than a year ago and is the equivalent to 54.7% of UK Gross Domestic Product (GDP) and is way above Labour’s fiscal rules (now obsolete) which said that debt would not exceed 40% of GDP.

Chancellor Alistair Darling is now estimating that borrowing will hit £175 billion this year as tax revenues decrease and spending on benefits rise.

Last month, credit rating agency Standard and Poor’s (S&P) revised its outlook for the UK from ‘stable’ to ‘negative’ following spiralling UK public debt levels.

According to S&P, the move was prompted by its opinion that the UK’s debt burden may reach 100% of GDP.

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