Govt debt exceeds GDP for first time since 1963

Government borrowing has exceeded economic output for the first time since 1963 as monthly borrowing rose to the highest on record because of the Covid-19 crisis, official figures showed.

Public sector net debt was £1.95bn at the end of May, an increase of £173.2bn from a year earlier, the Office for National Statistics said.

At 100.9% of GDP the total was the first time debt had outstripped output since the end of the 1963 financial year when Harold Macmillan was prime minister and The Beatles had just released their first LP. The sharp increase was the biggest since monthly records began in 1993 as Chancellor Rishi Sunak spent to prevent economic collapse.

Public sector net borrowing was an estimated £55.2bn in May, nine times more than a year earlier and the highest on record. Economists on average had expected a figure of £50bn. Borrowing in the financial year to date was £103.7bn, £87bn more than a year earlier and again the highest on record.

"The coronavirus pandemic has had an unprecedented impact on borrowing," the ONS said.

The figures reflect the government's spending on extraordinary measures to support the economy during the shock of the Covid-19 pandemic and lockdown, including subsidising the wages of furloughed workers and financial support for businesses. The government spent £91.6bn in May, almost 50% more than a year earlier, as receipts, including tax, fell 28.4% to £40.7bn.