UK national debt has reached its highest level since 1962, according to new official figures.
Total government debt hit 99.5% of the value of the economy in June, surpassing the highs recorded during the coronavirus pandemic for the first time.
UK Office for National Statistics (ONS) figures It also showed that government borrowing in June was higher than expected.
A fiscal statement is due to be released by Finance Minister Rachel Reeves by the end of the month.
Government debt refers to the total amount of liabilities that a government has accumulated over the years.
Borrowing refers to the difference between public sector spending and tax revenues in a particular period.
Treasury Secretary Darren Jones said the latest figures were a “stark reminder” of the “worst economic legacy” since the Second World War.
Last month’s borrowing of 14.5 billion pounds was the lowest for June in five years, helped by lower interest rates as inflation fell, but still more than economists had expected.
Pressure to increase spending on some public services and election pledges not to raise income tax, corporation tax or value-added tax rates have many economists expecting borrowing to rise.
Denis Tatarkov, senior economist at KPMG UK, said: “The new finance minister faces a tough task of funding the new government’s policies whilst keeping the public finances on a sustainable footing.”
“High spending levels, combined with weak growth prospects, will force difficult choices between further borrowing or significant tax increases to maintain spending levels.”
Further figures from the ONS Retail sales showed a larger-than-expected drop last month, with merchants saying they were hit by cold weather and uncertainty surrounding the election.
Retail sales fell 1.2% in June after a strong rise in May, the ONS said.
Sales at non-food retailers, such as clothing stores and department stores, fell the most, down 2.1%.
“Retailers indicated that election uncertainty, poor weather and reduced footfall had affected sales,” the ONS said.
