London (awp/afp) – London had to pay record interest on its debt in September due to accelerating inflation, while retail sales fell in a Britain in the middle of a political and economic crisis.
Interest on Britain’s debt reached £7.7bn in September, £2.5bn more than a year earlier and the highest amount paid since these monthly statistics began in 1997.
Since mid-2021, the government’s debt burden has “increased significantly, not because of the increase in debt” but “mainly because of inflation”, the Office for National Statistics (ONS) commented on Friday in its monthly report.
Government non-bank lending rose by 2.2% year-on-year to £20 billion in September, the highest level ever since these statistics began thirty years ago. , apart from the record during the Covid-19 pandemic.
For its part, public debt – excluding public banks – reached £2,450.2 billion at the end of September, or 98% of GDP and 2.5 percentage points of GDP more than a year earlier.
“To stabilize the markets, I said clearly that difficult decisions would be taken to protect” the government’s accounts, warned Jeremy Hunt, the Chancellor of the Exchequer.
Jeremy Hunt was appointed a week ago in the emergency in the face of the debacle in the markets caused by his predecessor’s budget measures, and is due to present a medium-term plan on October 31, which should include cuts in public spending and possible tax increases.
In particular, pressure is mounting to impose a tax on the profits of energy companies that is greater than today, and the British press is drawing attention to a possible taxation of banks, which are benefiting from the rise in interest rates.
However, since the resignation of Prime Minister Liz Truss on Thursday, Jeremy Hunt’s plan has been uncertain, with the new chancellor uncertain whether he will remain in office in the next government.
Amidst the political turmoil, the country is also going through a serious economic crisis, with inflation of more than 10%, the highest in the G7, flat growth, an energy crisis and an outbreak of precarity.
All this affects consumption: retail sales fell 1.4% in September compared to August, which had registered an even more significant decline (-1.7%).