UK government borrowing for October exceeded expectations, totaling £17.4 billion, which is an improvement from £19.2 billion in the same month last year. Analysts had projected borrowing to be around £15 billion, slightly above the Office for Budget Responsibility’s forecast of £14.4 billion made in March. The Office for National Statistics (ONS) noted that while overall borrowing was lower than last year, it remained the third-highest October figure recorded in cash terms.
In the financial year to October, total borrowing reached £116.8 billion, which is £9 billion more than during the same period the previous year and marks the second-highest borrowing since 1993. ONS chief economist Grant Fitzner mentioned that recent increases in public service and benefits spending were offset by higher tax and National Insurance receipts.
These figures raise questions about the upcoming Budget announcement by Chancellor Rachel Reeves, who has already indicated that tax increases and spending cuts may be on the table.
Additionally, Chief Secretary to the Treasury James Murray highlighted that one in every ten pounds of taxpayer money is currently allocated for interest on national debt, emphasizing the need for fiscal reform. Shadow Chancellor Sir Mel Stride remarked that borrowing levels this financial year are the highest recorded outside of the pandemic period, suggesting that fiscal control should be a priority.
Market analysts have stated that these borrowing figures complicate the Chancellor’s position ahead of the Budget, but some believe that the implications for immediate policy decisions may be limited.
Furthermore, ONS data indicated a 1.1% decline in retail sales in October, marking the first decrease since May, potentially influenced by consumers postponing purchases in anticipation of upcoming sales events. This decline is viewed by economists as part of a broader context affecting consumer confidence and government fiscal strategy.
Source: https://www.bbc.com/news/articles/c20508068jno?at_medium=RSS&at_campaign=rss