Britain’s consolidated debt burden, which combines that of central government and local authorities, could equal 100 per cent of gross domestic product in two years’ time, according to credit rating agency Standard and Poor’s, which assigned a negative outlook to the nation’s debt for the first time since it began assigning ratings 30 years ago.

David Beers, sovereign credit analyst at S&P, said that based on historical trends, there was roughly a one-in-three chance that the UK could lose its AAA rating over the medium term, a time horizon of about two years.