UK state debt has reached a level equivalent to the country’s annual output, as new data revealed on Friday. The Office for National Statistics reported that public sector net debt was provisionally estimated at 100 percent of gross domestic product (GDP) at the end of August, matching levels not seen since the early 1960s.
Prime Minister Keir Starmer, elected in early July, has warned that the upcoming budget announcement on October 30 will be “painful,” with expected tax rises and spending cuts. Finance Minister Rachel Reeves is set to present the country’s fiscal plans to parliament next month.
The government is already facing criticism for scrapping a winter fuel-benefit scheme that affects 10 million pensioners. Starmer has defended this decision as a necessary measure to address a £22-billion ($29 billion) fiscal gap reportedly left by the previous Conservative administration.
Friday’s data also indicated record-high borrowing for August, excluding the pandemic period. Darren Jones, a senior official at the UK Treasury, highlighted that the debt level is the highest since the 1960s and attributed the need for tough decisions to the inherited £22 billion deficit.
Looking ahead, a government watchdog recently projected that UK state debt could nearly triple over the next 50 years due to an ageing population and climate change.