UK government borrowing in September reached £20.2 billion, marking the highest figure for that month in five years, as reported by the Office for National Statistics (ONS). This amount represents an increase of £1.6 billion compared to the same month the previous year. The borrowing figure, defined as the gap between public spending and tax revenue, indicates financial challenges for the government ahead of the upcoming Budget.
Over the first half of the financial year, borrowing has totaled £99.8 billion, up by £11.5 billion from the same timeframe last year. Although there was a rise in tax and national insurance revenue, this was offset by an increase in debt interest payments. In September, the government paid £9.7 billion in debt interest, which is £3.8 billion higher than in September of the previous year.
Chancellor Rachel Reeves faces increasing pressure to address these challenges, with expectations that tax increases may be proposed in the November Budget to meet her financial guidelines. September’s borrowing figure was slightly below analysts’ predictions of £20.8 billion, though it exceeded the £20.1 billion forecasted by the Office for Budget Responsibility earlier this year.
Despite higher tax income attributed in part to elevated employers’ national insurance contributions, overall spending also climbed due to pay rises, heightened inflation affecting governmental operational costs, and inflation-linked boosts to state benefits. Public sector debt in the UK is currently estimated at 95.3% of GDP, reflecting levels not observed since the early 1960s.
In response to the figures, Chief Secretary to the Treasury James Murray noted the government’s commitment to managing public finances responsibly. However, Shadow Chancellor Mel Stride criticized the government, asserting that borrowing has risen significantly under the current administration. The recent ONS figures also included a correction relating to prior data on VAT receipts.
Source: https://www.bbc.com/news/articles/c8035130918o?at_medium=RSS&at_campaign=rss