The Government now owes a record £90,000 for every household in the UK after borrowing soared again in March to lift total public debt to more than £2.5 trillion.
Latest official data shows that Chancellor Jeremy Hunt was forced to borrow another £21.5 billion in the month — the second highest total on record for March — just to keep the wheels of Government turning.
Government spending rose by almost a fifth in the month as ministers handed out billions in support for families suffering with sky-high energy bills following the Russian invasion of Ukraine.
The figures came as separate data from market analysts Kantar showed food inflation easing slightly from a record 17.5 per cent to 17.3 per cent in the four weeks to April 16, the 10th month in a row it has been in double digits.
Alison Ring, director of public sector and taxation at the accounting industry body ICAEW, said: “Today’s data for the financial year to March 2023 emphasises just how weak a state the public finances are in, with debt now approaching an eye-watering £90,000 per household. The UK is still running big fiscal deficits, with a provisional shortfall between receipts and spending of £139 billion in 2022/23, while public debt over the past three financial years has grown by £715 billion or almost 40 per cent to £2.53 trillion.
“The UK Government’s financial position remains precarious, with high debt and limited headroom against its fiscal rules that reduce our resilience to future economic shocks. An ageing population, underperforming public services and a worsening global security situation are all putting pressure on Government spending, even as taxes rise.
“What is most concerning is weak public investment after the Government constrained spending to meet its short-term fiscal objectives, for example in scaling back HS2.
“Unfortunately, this will restrict economic growth in the medium and long term, and will also delay much-needed investment in the quality and cost-efficiency of public services.”
Mr Hunt said: “These numbers reflect the inevitable consequences of borrowing eye-watering sums to help families and businesses through a pandemic and Putin’s energy crisis.
“We were right to do so because we have managed to keep unemployment at a near-record low and provided the average family more than £3,000 in cost of living support this year and last.
“We stepped up to support the British economy in the face of two global shocks, but we cannot borrow forever. We now have a clear plan to get debt falling.”
The figures from the Office for National Statistics also reveal how the Chancellor raked in £40 billion more in income tax and national insurance as stealth taxes hit millions of workers.
Financial firm Hargreaves Lansdown said receipts from PAYE Income Tax and NIC1 (National Insurance) for April 2022 to March 2023 hit £378.2 billion, £40.2 billion higher than in the same period a year earlier.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “There’s no getting away from the fact our tax burden is growing as a series of threshold freezes and cuts kick in.”
