MercoPress. South Atlantic News Agency

UK public sector debt back to 1997 level: almost half of GDP

The takeover of Northern Rock has helped push the United Kingdom's public sector debt to almost half of gross domestic product (GDP) in the last year, just off highs seen over a decade ago when Labour came to power.

Figures from the Office of National Statistics (ONS) said net debt expressed as a percentage of GDP had risen to 43.3% at the end of September, with the takeover of the lender helping to push the figure up from 36.2% a year ago. The jump leaves net debt just off levels seen in 1997 when the figure was at 44.2%, with the rise taking net debt to a sum of £645.3 billion, compared with £514.5 billion last year. Without Northern Rock on the balance sheet, net debt would have come in at £563.4 billion. An alternative way of measuring public sector finances is public sector net borrowing. The figure hit a record high in September, with net borrowing of £8.1 billion in September 2008, compared with borrowing of £4.8 billion in September 2007. This was ahead of analysts' forecasts, with asset management firm Investec expecting borrowing to have come in at £6.8 billion.