Week 4, 2012: UK Public Sector Debt

Summary: It was announced this week that UK government debt reached £1,003,900,000,000 (or 64.2% of GDP) in December last year. That represents the highest debt to GDP ratio since at least 1975, when the online ONS records begin.

What does the chart show? The blue line shows the total UK public sector net debt (PSND) excluding all financial interventions in billions of pounds, measured against the left hand axis. The red line, measured against the right hand axis, shows net debt as a percentage of the UK's Gross Domestic Product (GDP).

Why is the chart interesting? £1 trillion of debt is a big landmark to pass. Public sector net debt has more than tripled in the last decade, although most of the growth has come since the recession. Debt rising as a result of the recession is to be expected, but it is the scale of the increase that is worrying. Although there is no need to ever completely remove the whole amount, at a current level of over 60% of GDP it is hard to see how we will ever be able to afford to return to the pre-2007 levels of "only" half a trillion pounds.

And don't forget, this number is excluding financial interventions. If you include them, total public sector net debt is currently at over £2.3 trillion - or roughly 150% of GDP.