By December 2020, the UK’s public debt to GDP ratio has reached its highest since 1962, official data revealed.
The Office for National Statistics (ONS) on Friday published its December report on public sector finances.
Data showed that in the first nine months of 2020/21 financial year (April to December 2020), the UK’s public sector net debt excluding public sector banks (PSND ex) rose by £333.5 billion ($455.7 billion), to reach over £2.13 trillion ($2.91 trillion), or around 99.4 percent of projected GDP, the highest debt to GDP ratio since the financial year ending 1962 (100 percent).
In December 2020, public sector net borrowing excluding public sector banks, (PSNB ex) is estimated to have been £34.1 billion ($46.6 billion), over seven times the amount of December 2019, which was £4.8 billion ($6.56 billion). It’s the highest December borrowing since records began in 1993, and the third-highest borrowing in any month, after April and May 2020.
Meanwhile, PSNB ex in the first nine months of this financial year (April to December 2020) is estimated to have been £270.8 billion ($370 billion), almost five times the figure in the same period last year, which was £54.6 billion ($74.6 billion), and highest since records began in 1993.
Central Government Finances
“Central government is the largest sub-sector of the public sector. Of the £34.1 billion borrowed by the public sector in December 2020, £34.0 billion was borrowed by central government,” the report reads.
Between April and December 2020, central government tax and national insurance receipts fell by a total of £39.6 billion ($54.1 billion) compared with the same period in 2019, or 7.8 percent.
During the same period, government spending to support individuals and businesses affected by restriction measures to control the CCP virus pandemic contributed to an increase of £169.3 billion ($231.3 billion) in central government day-to-day spending, or a 30.7 percent increase.
Central government tax receipts in December 2020 are estimated to have been £43.6 billion ($59.6 billion)—£1.4 billion ($1.9 billion) less than in December 2019.
Day-to-day spending of central government bodies in December is estimated to have been £86.2 billion ($117.8 billion)—£26.1 billion ($35.7 billion) more than in December 2019.
Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £33.4 billion ($45.6 billion) in December 2020, bringing the current financial year-to-December total to £318.1 billion ($434.6 billion), nearly double the highest cash requirement in any other April to December period since records began in 1984.
The estimated general government net borrowing between April and December 2020 is around 12.7 percent of GDP, while general government gross debt stood at around 102.9 percent of GDP at the end of December 2020.