Britain’s public sector net debt has climbed to £2.985 trillion, putting the country within touching distance of the £3 trillion mark as higher debt-interest costs and welfare spending continue to increase government borrowing.
Official figures showed the government spent £7.7 billion on debt interest in July, almost 10% more than a year earlier.
Spending on state pensions and other welfare benefits rose 7.2% to £30 billion during the month, reflecting increases in benefits linked to inflation and earnings.
By the end of July, the UK’s debt pile was around £96 billion higher than a year earlier.
Economists expect total public debt to exceed £3 trillion during 2026, with the Office for Budget Responsibility previously forecasting that the threshold could be crossed as early as September.
Despite the increase in cash borrowing, debt as a proportion of the economy stood at 94.1% of GDP. Higher inflation has increased the nominal size of the economy, mechanically reducing the debt-to-GDP ratio even while the absolute debt burden continues to rise.
The figures underline the pressure facing the government from higher borrowing costs, rising welfare expenditure and the growing cost of servicing accumulated debt.
