24 January 2012

UK National Debt Tops £1trn For First Time

The latest figures from the Office for National Statistics showed the nation's total debt rose to 64.2% of GDP in December, taking it over £1,003.9bn.

It was a 14% rise on the same time a year ago when Government debt was £883bn, and the highest figure since records began in 1993.

December's figures also showed UK public sector borrowing fell to £13.7bn.

It was lower than the £14.9bn forecast thanks to stronger tax receipts.

The amount compares to the £18.1bn borrowed by the Government in November 2011.

Analysts said Chancellor George Osborne was on course to meet his fiscal targets.

Commenting on the statistics, RBS economist Ross Walker told Sky News: "We now have three-quarters of the year's data... and we're heading for a small undershoot in terms of the borrowing figures for this year."

However, experts also warned that the uncertain economic outlook could derail the Treasury's plans.

Howard Archer, from IHS Global Insight, said: "The public finances saw clear improvement in December compared to a year earlier.

"However, it seems inevitable that the public finances will be increasingly pressurised over the coming months by muted economic activity eating into tax revenues and pushing up unemployment benefit claims.

"There remains a very real danger that the Chancellor will before long face the difficult decision of accepting further slippage in his fiscal targets or imposing more fiscal tightening on a struggling economy."