THE financial crisis is likely to add up to £1.5 trillion to the national debt, the Office for National Statistics (ONS) has said. The surge comes from the huge liabilities of bailed-out banks – such as Royal Bank of Scotland and Lloyds Banking Group – being taken on to the public balance sheet.
The government has also offered a total of £330 billion in guarantees to the financial sector as of the end of September, the ONS said.
The £1.5 trillion figure is roughly equivalent to the economic output of the entire country for one year.
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ded to the latest Treasury figures – which forecast UK debt of £792bn for the current financial year, the sum would take the UK's national debt to a whopping £2.3tn.
It is also at the upper end of the range put forward by the ONS when it made its initial estimate of the impact of the crisis on the public accounts in February.
The liabilities of the bailed-out banks have been added for classification purposes, but taxpayers are not on the hook for the whole amount, because that would require every loan held by all the bailed-out or fully nationalised banks, such as Northern Rock, to have turned sour.
Instead, sales of these loans back to the private sector are likely eventually to reduce the public sector's exposure.
But the measures taken so far have added an extra £4.7bn to net borrowing in 2008, and a further £3.3bn in the first three quarters of 2009 – mainly from the extra money that the government needed to finance its intervention.
In April, Chancellor Alistair Darling said he expected losses of up to £50bn to the taxpayer on moves to prop up the banks – although he now expects to revise this figure lower in the forthcoming Pre-Budget Statement.
Meanwhile, the unemployment rate in the United States rose to 10.2 per cent in October, which was its highest rate since April 1983, according to figures from the US labour department.
It rose from September's figure of 9.8 per cent, which means 190,000 people lost their jobs in the month.
Since the recession began in December 2007, the number unemployed in the US has risen by 8.2 million.
President Barack Obama described the rise in unemployment as sobering.
"I will not rest until all Americans who want work can find work," he added.
He also said he would be signing legislation to extend unemployment benefit, cut taxes for businesses and extend tax credits for home buyers.
