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UK debt stands at £2.3tn, or 99.6% of GDP

Compared to other Member States, the UK ranks eighth in gross general government debt as a percentage of GDP. Photo: John Sibley/Reuters

UK general government gross debt stood at £2.3 billion ($2.8 billion) at the end of the first quarter of the year, equivalent to 99.6% of gross domestic product ( GDP).

According to the Office for National Statistics (ONS) on Friday, it was 11.8 percentage points above the EU average.

Compared to other Member States, the UK ranks eighth in gross general government debt as a percentage of GDP.

Greece, Italy and Portugal came out on top, with the highest rankings, followed by Spain, France, Belgium and Cyprus.

Estonia, Luxembourg and Bulgaria are the countries with the lowest ratios.

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Meanwhile, the UK government’s deficit, or net borrowing, was £15.8 billion over the period. This was equivalent to 2.6% of GDP.

Debt as a percentage of GDP in the first quarter was 4.2 percentage points lower than the same period in 2021, but 16.8 percentage points higher than in the first three months of 2019, before the coronavirus pandemic.

It comes as a record interest bill pushed the budget deficit to £22.9billion last month, the second highest June since records began in 1993.

The Office for National Statistics (ONS) said last week borrowing was £4.1bn higher in June than in the same month a year earlier. It also beat the Office for Budget Responsibility (OBR) forecast of £600m.

Debt interest payments, which are being pushed up by inflation on the huge stock of index-linked government bonds, hit a record high of £19.4billion in figures worse than intended. This is more than double the previous monthly record.

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A quarter of the UK’s public debt is indexed, so the cost of servicing it is increased by inflation, which is at its highest level in 40 years.

Britain’s fiscal watchdog had forecast interest payments to rise to £19.7billion in June – slightly more than the actual figure – before falling back to £3.9billion in July.

Deteriorating UK public finance figures are making it harder for the new chancellor, and any new prime minister, to cut taxes to ease the cut in the cost of living.

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