UK debt exceeds £2 trillion and reaches its highest level in six decades

October 21, 2020 14:00

The UK's total public debt topped £2 trillion in September, representing 103.5% of its Gross Domestic Product (GDP) and the highest level since 1960, according to the Office for National Statistics (ONS). In just the month of September, the country's indebtedness reached 36.1 billion pounds, above forecasts and the highest recorded monthly figure.

The increase in British debt is a consequence of the measures adopted by the Government of Boris Johnson to face the serious economic impact that the coronavirus pandemic is having in almost all economic sectors. This crisis put the UK into recession in August for the first time since 2008.

The ONS has also released the UK Consumer Price Index (CPI), which stood at 0.5% in September from 0.2% in August. This slight rise is a consequence of the rise in prices of second-hand cars and the rise in hospitality, according to the office.

The data has been received with concern by the market, which fears a worsening of the economic situation due to the new restrictions to curb the wave of coronavirus infections. The FTSE 100 fell 1.3% at 10:30 am to 5,810 points.

Source: Admiral Markets MetaTrader 5. Daily CFD FTSE chart. Data range: from June 27, 2019, to October 21, 2020. Prepared on October 21, 2020, at 10:30 a.m. Keep in mind that past returns do not guarantee future returns.

As we see in the chart, the FTSE 100 index is supported at 5,810 points. We will have to wait for the next sessions to see if it breaks the support or rebounds. So far, in 2020, the London index has lost 23%. In the last five years, the FTSE 100 has only closed 2018 negatively (-12.48%).

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