2024-07-19 07:51:25
Getty ImagesThe UK’s national debt has reached its highest level since 1962, according to the latest official figures.
In June, total government debt accounted for 99.5% of the value of the economy, exceeding its peak during the COVID-19 pandemic for the first time.
UK Office for National Statistics (ONS) data It also showed that government borrowing exceeded expectations in June.
Chancellor Rachel Reeves is expected to make a statement on the state of public finances before the end of the month.
Government debt refers to the total amount of debt that a government has accumulated over the years.
Borrowing is the difference between public sector spending and tax revenues over a given period.
Darren Jones, chief secretary to the Treasury, said the latest figures were a “stark reminder” that the UK was facing its “worst economic legacy” since the Second World War.
Although borrowing last month, at £14.5bn, was the lowest for a June in five years, it was still higher than economists had forecast as falling inflation led to lower interest costs.
Many economists expect borrowing to rise amid pressure to increase spending on some public services and a campaign pledge not to increase income, corporation tax or VAT rates.
Denis Tartakov, senior economist at KPMG UK, said: “The new chancellor faces a difficult task: funding the new government’s agenda while keeping public finances sustainable.
“High levels of spending and weak growth prospects will present difficult choices – decisions about further borrowing or large tax increases if spending levels are to be maintained.”
Separate from the National Bureau of Statistics data The data showed retail sales fell more than expected last month, with stores saying they were hurt by cold weather and election uncertainty.
The Office for National Statistics said retail sales fell 1.2% in June after strong growth in May.
Non-food retailers such as clothing stores and department stores saw the biggest sales drop, at 2.1%.
“Retailers said election uncertainty, bad weather and low foot traffic had impacted sales,” the ONS said.
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