Coronavirus meltdown means UK debt is bigger than GDP for the first time in 57 YEARS at nearly £2trillion after the government borrowed a record £55billion in May
UK debt is bigger than GDP for the first time in 57 years as coronavirus wreaks havoc, it was revealed today.
Public sector debt was fractionally below two trillion pounds at the end of last month – equivalent to 100.9 per cent of GDP.
The grim milestone was reached after the government was forced to borrow £55.2billion over the month. That was nine time the figure for May last year, and the highest since records began in 1993.
The last time debt was bigger than the whole economy was 1963.
Public sector debt was fractionally below two trillion pounds at the end of last month – equivalent to 100.9 per cent of GDP
The Office for National Statistics (ONS) data underlines the scale of the damage being inflicted on business and the public finances by lockdown.
The government is now propping up 9.1million jobs through the furlough scheme, which together with the bailout for the self-employed is expected to cost more than £100billion.
The Bank of England has warned the country faces the worst recession in 300 years.
Yesterday its quantitative easing programme – effectively printing money – was expanded by £100billion to £745billion.
Interest rates are at an historic low of just 0.1 per cent in a bid to kickstart activity.
There was a small glimmer of light as the Bank’s monetary policy committee suggested the slump in activity this quarter might be slightly smaller than previously estimated – 20 per cent rather than 27 per cent.
Chancellor Rishi Sunak is putting together a stimulus package in a bid to get the country back up and running, with VAT cuts thought to be under consideration.