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June 21 (UPI) — Provisional estimates released on Wednesday indicate that Britain’s national debt exceeded $3.27 trillion in May, surpassing the critical 100% debt-to-GDP threshold for the first time in over six decades.
The Office for National Statistics stated that public sector net debt, estimated to be 100.1% of GDP at the end of May, is the result of the government borrowing more than double the amount it borrowed in May 2022 to address a $5 billion gap in energy support, welfare, public servants’ wages, and debt interest.
The government’s borrowing of $25.4 billion in May represents the second-highest figure for the month since records began in 1993.
The ONS cautioned that the debt-to-GDP figure is subject to revision.
“This estimate is likely to be revised in the future, as it partially relies on GDP estimates based on the latest Office for Budget Responsibility forecast, similar to what occurred during the COVID-19 pandemic when stronger GDP data replaced initial forecasts,” stated the ONS in a Twitter post.
From the start of the current financial year on April 6, the government has borrowed $54.6 billion, surpassing the $29.6 billion borrowed during the same period in 2022 and exceeding the OBR forecast.
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 national debt could have been even higher.
In response to Russia’s invasion of Ukraine and the COVID-19 pandemic, Hunt explained that the government has been making difficult decisions to restore the country’s financial stability.
“We appropriately spent billions to protect families and businesses from the worst impacts of the pandemic and Putin’s energy crisis,” Hunt stated. “However, it would be unfair to burden future generations with an unpayable debt. That is why we have made difficult but necessary decisions to balance the budget, reduce inflation, boost economic growth, and decrease debt.”
Reducing the national debt is one of Prime Minister Rishi Sunak’s five pledges for creating a more secure and prosperous Britain. These pledges were outlined in January as part of Sunak’s efforts to guide the country and the economy back on track after taking over from Liz Truss in October.
In September, Truss succeeded Boris Johnson, and the economic plan devised by Truss and her chancellor, Kwase Kwarteng, was centered on large tax cuts for businesses and the wealthy. However, this plan resulted in a surge in government borrowing costs and a run on the pound.
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