- Including the financial sector intervention, public sector debt rose to just under £800bn or 54 % of GDP.
- Excluding financial sector innovation, public sector debt is £657.5 billion or (46.6% per cent of GDP)
Needless to say, this rapid deterioration in public finances leaves any government little room for maneouvre. It will be a difficult balancing act to reduce borrowing without snuffing out any nascent recovery. However, at the moment there is no hope of reducing borrowing, figures suggest a remorseless rise in government borrowing over the next 2 years.
The ratings agency Standard & Poor's has put Britain's prized AAA rating on credit watch with a negative outlook. This is often a precursor to reducing a credit rating. A lower credit rating would make it more difficult and expensive for UK to borrow in future.