UK public debt exceeds 100% of GDP for first time since 1963

The UK government’s debt exceeded the size of the UK economy in May for the first time in more than 50 years as borrowing surged to pay for coronavirus mitigation measures, official data published on Friday showed.

In a set of public finance statistics that broke many records for the severity of the pandemic on government finances, gross central government debt — the money owed to the holders of gilts, national savings and creditors of Network Rail — exceeded £2tr for the first time ever in May. It rose £200bn over the past year to hit £2.009tr, according to the Office for National Statistics.

The figures showed the level of public borrowing to be on course to end the financial year about £300bn in the red, twice as bad as the worst year in the global financial crisis of 2008-09 and about 15 per cent of national income.

In May,

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UK regulator tells banks to rethink handling of crisis debt

Britain’s financial regulator has warned UK banks that they will need an entirely new way of dealing with personal and business debt, as the coronavirus pandemic pushes ever more borrowers into arrears or default. 

Charles Randell, chair of the Financial Conduct Authority, told bank bosses on Tuesday that the crisis had forced millions of their customers to add to debt levels that were already “too much” — and the regulator had to get involved, even though business lending is currently outside its remit. 

Speaking at a virtual UK Finance event attended by the chairs of the UK’s largest lenders, he said: “We need to reassess our approach to consumer debt” and “we need a robust framework for dealing with small business loans which turn out to be unaffordable”.

So far, more than 900,000 UK businesses have taken on an extra £38bn of debt under government-backed bailout schemes. But Mr Randell

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Student housing provider calls in debt collectors

A large provider of UK student housing has engaged debt collectors to pursue tenants who are withholding this term’s rent after the coronavirus crisis forced universities to close.

Notices have been served to tenants of properties run by Sanctuary Students, whose nationwide accommodation includes a number of halls in London, some of which are for students from the London School of Economics or the School of Oriental & African Studies.

The move puts Sanctuary at odds with other student accommodation providers such as Unite Students, Liberty Living and Blackstone-owned iQ Student Accommodation, which have waived rent for tenants wishing to leave early. 

Tomasz Jablonski, a first-year student at Soas and tenant at Dinwiddy House in King’s Cross, was contacted by debt recovery company Daniels Silverman and told to pay his outstanding balance of £1,736 within a week “to avoid the possibility of further action being taken”.

“I don’t have money

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George Osborne urges UK to write off Covid-19 business debt

George Osborne, former Tory chancellor, has said the UK government should eventually write off billions of pounds of loans to small companies to help speed recovery from the Covid-19 crisis.

Mr Osborne said officials at the Treasury would “hate” the idea but that the recovery would be delayed if companies were overburdened with debt accumulated during the crisis.

“There comes a point where it’s for the overall good of the country that you write off some of those debts even if they score as a loss on the government’s balance sheet,” he told the Commons treasury committee.

UK banks warn that up to half of the £18.5bn of “bounce back” coronavirus loans to small companies are unlikely to be repaid. More than 600,000 borrowers have taken advantage of the loans, which are capped at £50,000.

Although the loans come with a 100 per cent government guarantee on the capital and

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