UK debt matches GDP as Govt faces tough choices in upcoming budget

The UK’s public sector debt has reached 100% of the country’s annual economic output, marking a level not seen since the early 1960s, according to data released by the Office for National Statistics (ONS) on Friday.

Prime Minister Keir Starmer and finance minister Rachel Reeves have cautioned that the upcoming budget on October 30 will include painful decisions involving tax hikes and spending cuts to address a £22 billion shortfall in public finances.

The Labour government has already come under criticism for scrapping a winter fuel-benefit scheme for 10 million pensioners, a decision Starmer defended as necessary to repair the fiscal damage allegedly caused by the previous Conservative administration.

August borrowing figures also hit record highs outside of the pandemic period, prompting the government to make urgent fiscal adjustments.

Long-term projections from the Office for Budget Responsibility suggest that UK debt could nearly triple over the next 50 years, driven by challenges such as an ageing population and the effects of climate change.