In May, the public sector debt of Britain hit the highest level in over 60 years, rising above the nation’s annual economic output, according to the Office of National Statistics (ONS). The report comes out as government borrowing has exceeded expectations.

Excluding borrowing from state-controlled banks, public sector net debt reached £2.567 trillion ($3.28 trillion) by the end of last month, which was equal to 100.1% of gross domestic product (GDP) according to ONS data.

It is the first time the public sector debt has risen above the nation’s GDP since 1961. Now the entire UK economy combined is not as large as its public sector borrowing.

Government borrowing hit £20.045 billion ($25.5 billion) in May, a decline from £3 billion ($3.8 billion) seen in April, but still above expectations of £19.5 billion ($24.8 billion), according to ONS data. May 2023 public sector debt came in £10.7 billion ($13.6 billion) higher than in May 2022, marking the second-highest level recorded for a month of May since recordkeeping began in 1993.

The ONS data on public sector debt was released alongside inflation data, showing that inflation continues to remain persistently high in Britain.

PwC economist Divya Sridhar said, “This will likely drive up spending through increased debt interest payments and inflation-linked benefits and tax credits.”

Last month inflation was at 8.7%, exceeding expectations for the fourth month in a row.