National debt to rise £128.6bn under new UK accounts system

PUBLIC debt levels are set to surge further under new national accounting rules, according to the latest figures on the Treasury’s financial health.

The UK’s net debt will climb from the £1.285 trillion which was recorded in May, excluding the effect of one-off financial interventions, up to £1.417 trillion under the new system.

For the 2013-14 financial year, the public debt would have been £128.6bn higher than official statistics currently show.

The change comes in September with a number of alterations to official measures of the country’s economic health, brought in by the new European System of Accounts, which will bring participating nations under a unified statistical system.

A large chunk of the change in estimates of the national debt is down to the reclassification of Network Rail as part of central government, and a different treatment of pension liabilities.

Earlier this month, the Office for National Statistics (ONS) announced alterations to the way GDP is recorded, which means the estimated output of the economy was 4.6 per cent higher in 2009 than previously thought, a change of £65bn.