The United Kingdom's public debt has now risen to match its annual economic output, according to data released on Friday by the Office for National Statistics (ONS). The ONS revealed that public sector net debt was estimated at 100% of Gross Domestic Product (GDP) by the end of August, a level not seen since the early 1960s.
Prime Minister Keir Starmer, whose Labour government took office in July, has cautioned that the upcoming budget announcement on October 30 will involve "painful" decisions, with potential tax increases and spending cuts on the horizon. Finance Minister Rachel Reeves, set to deliver the fiscal plans, echoed this warning.
One of the most contentious moves already facing backlash is the government's decision to scrap a winter fuel-benefit scheme, which previously supported 10 million pensioners. Starmer has defended this as a necessary step to address a £22 billion ($29 billion) budget deficit, which Labour attributes to the former Conservative administration.
Friday’s data also revealed record borrowing for the month of August, excluding the pandemic period. Treasury official Darren Jones emphasized that the current debt level, at 100% of GDP, reflects the UK's highest since the 1960s. He added that the government is making "tough decisions" to tackle the £22 billion deficit and stabilize the economy.
Looking further ahead, the Office for Budget Responsibility recently forecasted that UK debt could nearly triple in the next 50 years due to factors such as an ageing population and climate change.
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