Bail-out banks add £1.5 trillion to debt

The Royal Bank of Scotland and Lloyds TSB, the two banks bailed out by the government, will add between £1 trillion and £1.5 trillion to the public debt – the equivalent of between 70 and 100 per cent of gross domestic product, the Office of National Statistics (ONS) has warned. The ONS said it had decided to classify the banks as public entities from 13 October 2008, and analysts believe that the government will probably have to revise up its borrowing forecasts in April’s budget.