By Simon Miller

UK public debt has exceeded £1trn for the first time according to preliminary figures from the Office for National Statistics.

Excluding financial interventions, net debt reached £1,0039bn, equivalent to 64.2% of GDP, compared with £883bn a year ago.

However, the Chancellor of the Exchequer George Osborne had better news with borrowing falling by £2.2bn from a year earlier to £13.7bn, and the deficit falling to £10.8bn in December from £15.2bn the previous month and the fourth such consecutive fall. The fall was bigger than the £12.1bn forecasted.

As a result, Osborne is still on course to hit his borrowing target for the financial year of £127bn with borrowing currently standing at £103.3bn so far.

Tax receipts have been boosted by the bank levy and the VAT increase from 17.5 to 20% while central government spending fell by 0.9%.

The Treasury said that the £1trn national debt simply showed the "unsustainable level of spending this country built up over the past few years".

The UK is one of the few European countries to enjoy an AAA rating whcih it put down to the austerity measures quickly agreed and put in place following the 2010 election.

As a result, investors sought UK bonds as safe havens with yields reaching record lows in recent months. UK 10-year bonds are currently slightly up at 2.15.

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