UK state debt rose to levels not seen in more than 60 years in May despite lower-than-expected government borrowing, according to official figures.
The data, which comes just two weeks before the general election, highlights the fiscal challenge facing the next government, with both Labor and the Conservatives pledging to reduce debt.
The Office for National Statistics (ONS) found that net public sector debt as a proportion of GDP in the UK rose to 99.8% during the month.
The Office for National Statistics said this was the highest reading since March 1961.
Both Labor and the Conservatives said in the run-up to the election that they would commit to a fiscal rule to reduce the debt-to-GDP ratio over the next five years.
Prime Minister Rishi Sunak promised debt reduction as one of his five pledges at the start of 2023.
This came as the Statistics Authority also revealed that net public sector borrowing reached £15 billion during the month.
Preliminary data found that public sector borrowing – the difference between government spending and income – was £0.8 billion higher than in the same month the previous year.
It was also the third-highest May since monthly records began in 1993.
However, this was £0.6 billion lower than forecast by the Office for Budget Responsibility (OBR), the government’s official forecaster, and was also lower than economists had expected.
The central government took receipts – money it receives, mostly through taxes – worth £76.8bn for the month.
This represents an increase of £1 billion after taking in more through income tax, corporation tax and VAT.
Meanwhile, government spending was £91.6 billion for May, £2.8 billion more than in the same month the previous year.
This increase was partly linked to a £2.2 billion rise in social benefits following an inflation-related rise in benefit payments.
Departmental spending on goods and services was also higher following inflationary pressure on operating costs.
Thomas Pugh, economist at RSM UK, said: “In the first two months of the financial year, borrowing was £3.3 billion below the forecast given by the Office for Budget Responsibility in March.
He added: “This will make things a little easier for the new government, but given the amount of financial pressures coming in the next parliament, it is a drop in the ocean.”
“Given that current tax and spending plans appear very difficult to implement, the new government will have to collect more taxes, or borrow more.
“Just keeping departmental budgets that are not protected in real terms stable would add an extra £20 billion to government spending.”