Sunak Says UK ‘Debt Is Falling,’ But That’s Still Years Away

Joe Mayes
·3-min read

(Bloomberg) -- Prime Minister Rishi Sunak claimed victory in one of the five metrics he wants UK voters to judge him by, saying in a campaign-style video posted to social media on Tuesday that “debt is falling.”

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That’s a stretch by any measure, though. Even his more equivocal position Parliament on Tuesday — that “debt is set to fall” and “on track to fall” — is still years away from playing out.

Trailing Keir Starmer’s opposition Labour Party by about 20 points ahead of a UK general election expected next year, Sunak is under huge political pressure to show he can deliver on what he promised soon after becoming prime minister just over a year ago. He also staked his administration on integrity and professionalism, to contrast his predecessors Boris Johnson and Liz Truss.

The problem is that according to the latest forecasts from the Office for Budget Responsibility in March, debt as a share of the size of the economy is only due to fall between 2026-27 and 2027-28, in line with the government’s self-imposed fiscal rules. Meanwhile data from the Office for National Statistics shows underlying government debt rose to 89.3% of GDP at the end of September, compared to 83.4% a year earlier.

“It’s not accurate to say that debt is falling,” Ben Zaranko, senior research economist at the Institute for Fiscal Studies think tank, told Bloomberg when asked about Sunak’s video claim. “Public sector debt is currently rising in cash terms, real terms, and, most importantly, as a percent of national income.”

Sunak’s spokesman, Max Blain, had no immediate comment during a regular briefing with reporters, when asked about Sunak’s “debt is falling” language. Pressed to clarify, a Conservative official later said the point is that the government is on track with its plan to get debt falling.

Parliament rules can force a minister to correct the record or risk further sanction, if they make a statement that is deemed to be inaccurate.

Along with cutting the national debt, Sunak also promised to grow the economy, stop small boats crossings, halve inflation and cut National Health Service waiting lists. In his video, Sunak said his government is delivering on all of them, though he said there’s more to work to do on NHS waiting lists. They have continue to hit record highs, while Bloomberg analysis also shows the economic is probably already in a recession.

“Today the results are clear,” he said. “Inflation is down, easing the burden of the cost of living. The economy is growing and debt is falling.”

On debt, there is one measure that could generously be interpreted as showing a fall, according to the IFS. Total debt including Bank of England liabilities may have stabilized in cash terms at around £2.6 trillion ($3.2 trillion) at the September, according to the ONS data.

That means it probably fell slightly as a share of the economy — but the IFS also said it is affected by various measures including BOE loan program, which are unrelated to the government’s fiscal plans.

--With assistance from Ellen Milligan.

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