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The UK’s state debt has now reached levels equivalent to the country’s annual economic output, according to new data released on Friday.
The Office for National Statistics (ONS) reported that public sector net debt was estimated at 100 percent of Gross Domestic Product (GDP) by the end of August, a figure last seen in the early 1960s.
Prime Minister Keir Starmer, whose Labour government took office in July, has warned of tough decisions in the upcoming October 30 budget, signaling potential tax increases and spending cuts as the Finance Minister Rachel Reeves is set to deliver the fiscal plan, which has already drawn criticism for cutting a winter fuel-benefit scheme affecting 10 million pensioners.
Starmer has defended the move as necessary to address a £22 billion deficit in public finances, which he blames on the previous Conservative administration.
Darren Jones, a senior UK Treasury official, highlighted the highest August borrowing on record, excluding the COVID-19 pandemic, underscoring the scale of the challenge.
A government watchdog has also forecast that UK debt could nearly triple over the next 50 years due to an ageing population and the impact of climate change.
