According to data from the Office for National Statistics (ONS), Britain has sunk even further into debt during September by piling another £78 billion on top of the already huge debt pile, taking the amount of debt that we are in up to £1.524 trillion.
The Government has been in a constant struggle over the past few years when it comes to state borrowing, and although some figures show that spending in some sectors is slowly reducing, the overall state debt is still reaching incredibly high levels.
How the Sectors are Affected
The data from ONS shows that the net debt of the public sector is equivalent to 80.6% of Gross Domestic Product (GDP) which is 4.9% higher than it was in September last year.
The GDP is how we measure the size of the economy and it shows how well the economy is performing.
However, borrowing by the public sector is down by £1.6 billion compared to this time last year, taking the total amount borrowed in 2015 to £19.4 billion.
The total amount borrowed this financial year stands at £46.3 billion, which has also seen a decrease of £7.5 billion compared to the same time frame last year, but that doesn’t mean we are out of the woods yet.
The Future of Britain’s Debt
So what do these figures mean for the future of debt in Britain? Although there are decreases in the amount of borrowing being done, there is still a huge amount of debt that needs to be cleared up.
IHS Global Insight, one of the leading economic and financial forecasters think that the Chancellor of the Exchequer George Osborne will have some trouble meeting the borrowing targets that he made during his July budget announcement.
Howard Archer, OHS Global Insight’s chief economist has been reported as saying “George Osborne still has his work cut out to meet his fiscal targets for 2015/16. Indeed, if the pattern of the first half of the fiscal year continued, [borrowing] would amount to £77.6 billion in 2015/16, which would mean that Mr. Osborne would overshoot by some £8 billion the target of £69.5 billion contained in his July budget.”
So although borrowing is currently lower than this time last year, it seems as though the Chancellor may have overestimated the growth of the economy, resulting in a possible overspend of his borrowing budget.
To combat this, George Osborne is expected to announce further cuts in his spending review this month with the view that it will bring down the amount that is being borrowed considerably. In fact, four government departments have provisionally agreed to cut their spending by 30% over the next four years.
As providers of leading debt advice in Scotland, we understand how distressing and scary debt can be., no matter whether it is your own debt or the debt that we are facing as a nation. If you are looking for friendly, helpful debt advice, don’t hesitate to contact us today by calling 0800 011 2322 and have a chat to one of our debt advice specialists.