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Britain’s Chancellor of the Exchequer Rishi Sunak talks with staff as he visits a Jobcentre Plus in Barking, east London on July 16, 2020.
anthony upton/Agence France-Presse/Getty Images
Britain has racked up debt as its economy has cratered, sending its debt-to-GDP ratio to the highest level since 1961, according to data released Tuesday.
The country’s debt-to-GDP ratio reached 99.6%, an increase of 18.9 percentage points compared with the same point last year, the ONS said.
Debt at the end of June was £1.94 trillion, which is £195.5 billion more than at the same point last year.
In June, central government receipts fell 16.5% while expenditure rose 24.8%.
Despite the mounting debt, interest rates are near record lows. The benchmark 10-year gilt TMBMKGB-10Y, 0.156% was just 0.149% on Tuesday.
“This same story of surging debt and low borrowing costs applies across the advanced world. Low inflation expectations, a glut of global savings and the huge asset purchases by central banks enable governments of advanced nations to run up massive debts to deal with the pandemic without pushing borrowing costs higher,” said Kallum Pickering, senior economist at Berenberg Bank in London.
The data was released alongside the latest public sector net borrowing figures, which showed borrowing of £34.8 billion in June, lower than the revised £44.7 billion in May.
The pound GBPUSD, +0.30% was trading at $1.2686, up from $1.2660 on Monday.
