1 of 2 | Chancellor of the Exchequer Jeremy Hunt said Britain had been taking "difficult decisions" to balance the country's finances after Russia's invasion of Ukraine and the COVID-19 pandemic government borrowing reached a 60-year high. File Photo by Hugo Philpott/UPI |
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June 21 (UPI) -- Britain's national debt hit $3.27 trillion in May, broaching the critical 100% debt-to-GDP barrier for the first time in more than 60 years, provisional estimates released Wednesday indicate.
Provisional estimates calculate public sector net debt at 100.1% of GDP at the end of May after the government borrowed more than double the $11.8 billion it borrowed in May 2022 to plug a $5 billion gap between its receipts and spending on energy support, welfare, public servants' wages and debt interest, the Office for National Statistics said.
The $25.4 billion government borrowing was the second-highest figure for May since monthly records began in 1993.
The ONS cautioned that the debt-to-GDP figure was highly prone to being revised.
"This estimate is liable to be revised in future because it partly relies on GDP estimates based on the latest Office for Budget Responsibility forecast, as happened during the COVID-19 pandemic when stronger GDP data replaced initial forecasts," ONS said in a Twitter post.
Borrowing so far this financial year, which started April 6, hit $54.6 billion compared with the $29.6 billion the government borrowed in the same period in 2022 and $2.7 billion more than the OBR forecast it would need to.
National debt could have been even higher if not for higher tax receipts offsetting some of the increase in debt interest payments and government spending cuts implemented by Chancellor Jeremy Hunt.
The government had been taking "difficult decisions" to balance the country's finances after Russia's invasion of Ukraine and the COVID-19 pandemic, Hunt said.
"We rightly spent billions to protect families and businesses from the worst impacts of the pandemic and [Vladimir] Putin's energy crisis.
"But it would be manifestly unfair to leave future generations with a tab they cannot repay," said Hunt. "That's why we have taken difficult but necessary decisions to balance the books in order to halve inflation this year, grow the economy and reduce debt."
Reducing national debt is one of five pledges for a more secure and prosperous Britain set out by Prime Minister Rishi Sunak in January as he sought to get the country and the economy back on track after taking over from Liz Truss in October.
Truss, who replaced Boris Johnson in September, and her chancellor, Kwase Kwarteng. sparked a crisis after their plan for the economy centered on huge tax cuts for business and the wealthy saw government borrowing costs rocket and a run on the pound.
