Britain's debt mountain reaches £1.39TRILLION, equivalent to 90% of the entire economy, ONS reveals
- Gross debt at the end of 2012 stood at £1.387trillion, up 7% on 2011
- Vast sum is equivalent to 90% of GDP - up from38% a decade ago
- Figures used to compare UK to the rest of Europe
- Mounting debts reveal the devastating impact of the 2007 crash
By Matt Chorley, Mailonline Political Editor
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Britain’s debt mountain has topped £1.387trillion, and is now the equivalent of 90 per cent of the entire economy.
The grim milestone was passed at the end of 2012, new figures from the Office for National Statistics revealed today.
It lays bare the dire state of the nation’s finances in the wake of the 2007 financial crash, which has seen government debt double in just five years.
Gross national debt has risen dramatically since the financial crash in 2007, new figures from the Office for National Statistics show
The shocking figure will be used later this month to compare Britain’s finances to the rest of Europe.
The ONS said that in December gross debt, which includes all financial liabilities of both central and local government but does not take account of liquid assets, was £1,387,436,000,000, up seven per cent on a year earlier.
By comparison, the entire British economy was valued at £1,541,465,000,000.
The dismal state of government borrowing has already forced Chancellor George Osborne to abandon his target to see net debt, a different measure, falling as a percentage of the economy by 2015-16. But he has refused to budge on his austerity programme.
In last month’s Budget, Mr Osborne told MPs his chance of meeting his debt targets had ‘deteriorated’.
He added: ‘There are those who would want to cut much more than we are planning to – and chase the debt target.
‘I said in December that I thought that with the current weak economic conditions across Europe that would be a mistake. We’ve got a plan to cut our structural deficit.
‘And our country’s credibility comes from delivering that plan, not altering it with every forecast.’
In a boost for George Osborne, today's figures show how annual government borrowing has fallen markedly since 2009
Gross debt had been fairly level in the decade from 1992, when John Major won the general election. It rose from £238billion in 1992 to £402billion 10 years later.
But under Labour debt levels gradually climbed before the financial crash in 2007 led to an explosion in borrowing.
Chancellor George Osborne, pictured yesterday, has been forced to abandon his debt targets as the economy has taken longer than expected to revive
In the last five years gross debt has soared from £577billion in 2006 to £1.387trillion in 2012.
It means gross debt is equivalent to 90 per cent of the entire UK economy, well above the 60 per cent threshold set by the European Union.
The UK gross debt level is up from 85.5 per cent of GDP at the end of 2011 and just 43.3 per cent in 2006.
Chris Leslie, Labour's shadow Treasury minister, said: 'For all David Cameron's false claims to be paying down Britain's debts, the national debt has gone up and up on his watch.
'And far from getting the deficit down, the Office for Budget Responsibility has said it will be the same this year as it was last year and the year before. This can no longer be called a deficit reduction plan.
'This is happening because our economy has flatlined for the last three years and unemployment is high and rising again. We should be acting to get the economy moving, not paying for the mounting costs of this government's total economic failure.'
Under rules agreed in the Maastricht Treaty, all European countries must report every year on their finances to ‘avoid excessive budgetary deficits’.
Under the rules countries should run a debt to GDP ratio of 60 per cent.
In a boost to Mr Osborne, today’s figures show that government borrowing is falling.
The gap between government spending and what it raises through taxes peaked at £161billion in 2009, falling to £150 billion in 2010, £119billion in 2011 and £98billion in 2012.
It means net borrowing as a percentage of GDP stood at just 6.8 per cent at the end of 2012, its lowest level since 2008 and at similar levels to those seen in the mid-1990s.
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Let's get out of UKIP, vote EU.
- modified.karl , London - Europe, United Kingdom, 04/4/2013 15:16
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