UK Public Debt Exceeds £2 Trillion as Pandemic Strains National Economy

LONDON, KOMPAS.com – Official data showed that UK public debt exceeded £2 trillion for the first time as the coronavirus pandemic pushes the UK economy deep into recession.

The British government has carried out massive state borrowing as the national economy struggled to stay afloat amid lockdowns and social restrictions.

The Office for National Statistics reported total accumulated debt reached £2.004 trillion ($2.61 trillion or €2.2 trillion) at the end of July.

Read also: UK Economy Enters Recession Stemming from Coronavirus Lockdowns

UK public debt is equivalent to 100.5 percent of the UK’s annual GDP or total economic output which is the highest since 1961.

The debt increased by £227.6 billion compared with July 2019, reflecting the huge increase in borrowing needed to tackle the pandemic.

"This crisis has put the public finances under significant strain as we have seen a hit to our economy and taken action to support millions of jobs, businesses and livelihoods," finance minister Rishi Sunak said.

"Without that support things would have been far worse."

Net borrowing between April and the end of July is estimated to have hit £150.5 billion, the ONS said.

Last month's deficit figure hit £26.7 billion, as the UK emerged from a strict lockdown imposed at the end of March to curb the spread of the coronavirus.

Read also: Jakarta Delays Exit from Partial Lockdown for the Fourth Time

"Today's figures are a stark reminder that we must return our public finances to a sustainable footing over time, which will require taking difficult decisions," Chancellor of the Exchequer Sunak said.

"It is also why we are taking action now to support the growth and jobs which pay for our public services, by helping businesses to reopen safely."

Retail recovery

Separate official data Friday showed that British retail sales jumped by 3.6 percent in July from June as shops, restaurants and pubs reopened.