New figures from the Office for National Statistics (ONS) show UK national debt has reached nearly £3 trillion, with the government spending £7.7 billion every month on interest alone — more than it spends on defence, police and prisons combined.
Government borrowing unexpectedly rose to £1.8 billion last month, £700 million higher than a year previously. The Office for Budget Responsibility had predicted a £500 million surplus.
Debt Nears £3 Trillion Milestone
Total UK debt now stands at £2.985 trillion, equivalent to 94.1% of gross domestic product (GDP). Income tax receipts hit £17.1 billion last month, up £1.7 billion on a year ago, but spending outweighed the tax boost.
An additional £2 billion was spent on social benefits compared with a year ago, while interest on government debt payments rose by £700 million to £7.7 billion last month.
Tax Rises 'Inevitable'
Chancellor John Healey insisted the government was cutting the deficit, saying: “Fiscal discipline is the bedrock of our UK economic stability and national security.”
But Thomas Pugh, chief economist at RSM UK, said: “The commitment to sticking to the fiscal rules means further tax rises are inevitable come the autumn Budget. The risk is that more borrowing to spend fuels inflation and pushes up gilt yields further, leaving the new Chancellor having to borrow more just to stand still.”
Political Reaction
Conservatives accused Labour of “tapping the nation’s credit card while the bailiffs are at the door.” A Conservative spokesman said: “The ONS has confirmed the national debt is now almost £3 trillion. That is over £100,000 of debt for every single household in Britain. And we are all paying for it, every day. We spend more on just the interest of our soaring debt than we do on our defence, police, and prisons combined.
“We simply cannot afford the price of Labour. They already plan to borrow over a quarter of a trillion pounds more than the plans they inherited. It is ordinary families, their children and grandchildren who are left to cover the bill. Only the Conservatives have a credible plan to get the national debt down with £50 billion in spending cuts, starting with the welfare bill.”
Grant Fitzner, chief economist at the ONS, said: “Borrowing was slightly higher this month than in July last year, with spending growth outpacing higher receipts, including from self-assessed taxes which often feed in more strongly in July.”
