UK GOVERNMENT debt has risen above £2 trillion for the first time amid heavy spending to support the failing capitalist economy amid the coronavirus pandemic.
Spending on measures such as the furlough scheme means the debt figure now equals the value of everything the UK produces in a year.
Total debt hit £2.004tn in July, £227.6bn more than last year, said the Office for National Statistics (ONS).
Economists warned the situation would worsen before improving.
It is the first time debt has been above 100% of gross domestic product (GDP) since the 1960-61 financial year, the ONS said.
The July borrowing figure – the difference between spending and tax income – was £26.7bn, down from a revised £29.5bn in June.
It was the fourth highest borrowing in any month since records began in 1993. The three higher figures were the previous three months.
Ruth Gregory, senior UK economist at Capital Economics, said July’s borrowing figure was ‘another huge sum and pushes borrowing in the year to date to £150.5bn.
‘That is close to the deficit for the whole of 2009-10 of £158.3bn, which was previously the largest cash deficit in history, reflecting the extraordinary fiscal support the government has put in place to see the economy through the crisis.’
Chancellor Rishi Sunak said: ‘This crisis has put the public finances under significant strain as we have seen a hit to our economy and taken action to support millions of jobs, businesses and livelihoods.
‘Without that support, things would have been far worse.
‘Today’s figures are a stark reminder that we must return our public finances to a sustainable footing over time, which will require taking difficult decisions.’
Meanwhile, the delayed London Crossrail project may need an extra £450m, its board has said.
The route – known as the Elizabeth Line – was initially due to open in December 2018 but has faced numerous delays.
Crossrail has now said the line’s central section, from Paddington to Abbey Wood, would be ready to open ‘in the first half of 2022’.
The Mayor of London is said to be ‘deeply disappointed’ with the latest delay.
Transport for London’s new commissioner, Andy Byford, has been asked by City Hall to review Crossrail’s latest plans including any extra money the project may need.
The new date comes after the team behind the project said last month that the route would not meet its then-summer 2021 target opening.
‘We are working tirelessly to complete the remaining infrastructure works so that we can fully test the railway and successfully transition the project as an operational railway to Transport for London.’
