UK Debt Passes £2,000,000,000,000 For First Time Ever
The UK’s debt has reached a record high of £2.08 trillion, which could mean a limit to pay rises for public sector workers.
Rishi Sunak has defended the government’s decision to spend billions on the pandemic but said the UK’s finances needed to be put on a ‘sustainable path’ over time.
The latest figures from the end of October, come amid reports that the chancellor will use next week’s spending review to limit pay rises for five million public sector workers.
Only frontline NHS doctors and nurses will be exempt.
It is thought he will cap pay rises in the public sector to at or below inflation, as per the Metro.
However, teachers, police, members of the armed forces as well as NHS managers will all be affected.
The news, which comes after total government borrowing hit £22.3 billion last month, is likely to be met with backlash by public-sector unions, who said their members have been most affected by years of Conservative austerity cuts.
Sunak launched the spending review in July. At the time, he urged the need for restraint in future public sector pay settlement.
He said pay rises would have to take into account the ‘wider economic content’, and stressed the need for ‘fairness’. Sunak pointed out that while public sector pay was rising, wages in the private sector had taken a hit during the pandemic.
The Office of National Statistics (ONS) has said that borrowing for the first seven months of the financial year is now estimated at a total of £214.9 billion. This is the highest in any April to October period on record.
This means the UK’s overall debt has reached approximately 100.8% of its gross domestic product – the highest level since the early 1960s.
With the government spending more than £200 billion so far to support our economy through the pandemic, the ONS data also shows that government tax revenues were £39.7 billion last month, down £2.7 billion year-on-year as the pandemic saw falls in VAT, business rates and Pay As You Earn (PAYE) income tax.
Government spending on day-to-day activities has risen to £71.3 billion, up £6.4 billion on a year earlier, including £1.3 billion on the furlough scheme and £300 million in Self Employment Income Support Scheme payments.
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