LONDON, June 21 Reuters British public debt rose last month to its highest as a share of the economy since 1961, data showed on Friday, adding to the financial challenges the next government will face as soon as it comes to power after a general election in two weeks39; time.

Public sector net debt, excluding statecontrolled banks, reached 2.742 trillion pounds 3.47 trillion or 99.8 of annual gross domestic product in May, up from 96.1 a year earlier, the Office for National Statistics said.

The increase came despite slightly lowerthanexpected government borrowing in May, which stood at 15.0 billion pounds compared with economists39; median forecast of 15.7 billion pounds in a Reuters poll.

Britain looks headed for a change of government following an election on July 4, as Keir Starmer39;s Labour Party is far ahead of Prime Minister Rishi Sunak39;s Conservatives in the polls.

Public debt soared in Britain during the COVID19 pandemic, and the public finances have also been hit by slow growth and a rise in the Bank of England39;s interest rates to a 16year high.

Most other Western countries saw big increases in debt over the same period, and British debt levels are below those in the United States, France and Italy.

Borrowing in Britain totalled 33.5 billion pounds in the first two months of the financial year, 0.4 billion more than the same period in 2023, but 1.5 billion pounds less than government budget forecasts had predicted in March.

Consultants at Capital…