UK Government debt up again by £35 billion
UK Government debt up in June 2020, increasing by another £35 billion to new records. Total debt now stands at just under £2 trillion. The information comes from the ONS*.
UK Governments borrow when the money raised in taxes is not enough to pay for all government spending on services. They borrow the difference from investors and pay it back plus interest. This is normal for the UK; it happens nearly every year.
The chart above shows the increase in Government Debt back to 2008, just before the Credit Crunch. The line for 2021 is the current financial year so far, from April 2020.
What are the numbers?
Talking about the value of UK Government debt means thinking about some really large numbers!
Total Government debt is now £1,983.8 billion. Put another way, that’s £1.98 trillion.
It means that the UK Government owes £29,600 per person in Government debt.*
That number is equal to almost an entire year’s worth of UK economic activity across the private and public sector. (Called GDP or Gross Domestic Product). We have to go back as far as 1961 to find the last time that happened. The debt to GDP ratio, as it’s called, is now 99.6%
Recent borrowing continues to break records
- Monthly borrowing for May was £35.5 billion, the third highest monthly borrowing ever.
- Annual borrowing for the current financial year is already £127 billion, a record for the year so far
Government spending up
Total Government spending in June was £80.5 billion, an increase of 25% on the previous year.
Amount raised in taxes falls as Government spending increases
The amount of taxes we all pay has also fallen dramatically.
- Total taxes paid down 20%
- VAT down by 45%
- Corporation Tax down by 19%
- Income Tax down by 2%
What do the ONS say?
The ONS stated;
“The coronavirus (COVID-19) pandemic continues to have a significant impact on the UK public sector finances. These effects arise from both the introduction of public health measures and from new government policies to support businesses and individuals.”
Want to learn more? Full details from the ONS.
ONS* are the official UK statistics provider.
Some numbers rounded to make the article easier to read.
Government debt per person is simply the total debt of £1,983.8 billion divided by the UK population of 66,796,807.
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