Britain’s net debt exceeded 100 per cent of gross domestic product (GDP) in May for the first time since 1961. The debt was higher than expected. Inflation remained at 8.7 percent in May, while analysts expected it to slow. Core inflation then unexpectedly rose to the highest since 1992. This is according to figures released today by the UK’s Office for National Statistics (ONS).
For the first time since 1961
Net public sector debt, excluding the debt of state-controlled banks, was £2.567 trillion (CZK 71.5 trillion). This is the first time since 1961 that debt has exceeded 100 per cent of GDP, although this figure was also recorded at the time of the covid-19 disease pandemic but was then revised downwards.
Government borrowing stood at £20.045 billion in May, according to the ONS. Analysts polled by Reuters had expected net public sector borrowing excluding state banks to be £19.5 billion.
ONS chief economist Grant Fitzner said air fares had risen more than a year ago and were at a higher-than-normal level in May. He said rising prices for used cars, live music events and computer games also contributed to inflation remaining high.
The most resilient inflation
Inflation in Britain has proved more resilient than in other leading advanced economies. The consumer price index is the highest of the G7 countries, with Italy second at eight per cent. High inflation also poses a problem for Prime Minister Rishi Sunaka, who has promised to halve the rate of price rises by the end of 2023.
The inflation report comes a day before the Bank of England’s monetary policy committee meets. The bank is expected to raise its main interest rate for the 13th consecutive time, to 4.75 percent from 4.5 percent.
Source: ČTK
