UK is bankrupt! – UK national debt is 103.5% of GDP

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Students contrast their debts with bankers bailouts

UK GOVERNMENT borrowing hit £36.1bn in September as the UK continued heavy spending to support the economy during the coronavirus pandemic.

The figure was £28.4bn more than last year, and the third highest in any month since records began in 1993, the Office for National Statistics said.

The ONS said the pandemic has had an impact on public sector borrowing ‘unprecedented in peacetime’.

Extra money was needed to pay furlough wages and support businesses.

At the same time, tax income fell. Lower spending and corporate profits meant the government received less in VAT and corporation tax.

The national debt is now 103.5% of the size of the UK’s economy, as measured in gross domestic product (GDP).

The last time debt as a proportion of the economy was so large was 1960. Prior to that, a peak of almost 250% was reached in the aftermath of World War Two.

Under normal circumstances, such a high ratio may put off lenders to the UK. However, the government can currently borrow money for 10 years at 0.19%.

Inflation figures also out on Wednesday showed that the Consumer Prices Index in September climbed to 0.5%, from 0.2% in August.

A one-year spending review has been announced by the Treasury to ‘focus entirely’ on tackling the coronavirus crisis.

The Treasury pledged to ‘continue to show flexibility and creativity in our response’, saying the review was expected to conclude at the end of next month.

The review, it added, would set departments’ resource and capital budgets for 2021-22 and the block grants for the devolved administrations over the same period, as the pandemic places unprecedented peacetime demands on the public finances.

Last month, Chancellor Rishi Sunak said that the main priority for the Tory government is to ‘balance the books’, signalling massive tax hikes, attacks on pensions, pay and conditions of workers to come.