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UK national debt equates to £4500 for each UK family

In a startling turnabout the UK finances have taken a serious hammering over the last few months. A report today confirms that national debt now stands at £717 billion which equates to £4500 for every family in the UK. The figure of £717 billion is £100 billion higher than the government had forecast only last year and many experts believe this will move towards £2 trillion over the next 12 to 24 months. So how have things turned around so quickly?

There has been significant reduction in tax receipts for the UK government due to a slowing economy and the VAT cut in late 2008. VAT receipts themselves were down 31% over the 12 month period and overall tax receipts were down 10%. An even more alarming figure is net borrowings which stood at £1.1 billion a year ago but have since risen to £75.2 billion.

The government is being hit on all sides with a 6.5% increase in spending to £43 billion which included a £1 billion rise in social security benefits, which now stand at around £12.1 billion. As unemployment continues to soar this figure is sure to rise significantly in the short to medium term heaping more pressure on the budget of the UK government.

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