Rising debt interest payments pushed UK public sector borrowing to much higher levels last month than economists had expected, highlighting the challenges facing the incoming prime minister.
Data released by the Office for National Statistics on Friday showed public sector net borrowing was £20bn in September, £2.2bn more than in the same month last year and the second highest since monthly records began in 1993. It was a monthly loan amount.
The figure was well above the £14.8bn forecast in March by the UK’s official watchdog, the Office for Budget Responsibility, and also exceeded the £17bn forecast by economists surveyed by Reuters.
Interest payments on government debt rose to £7.7bn in September, £2.5bn more than in the same month last year. The increase in interest payments reflects a rise in the retail price index to which index gold coins are tracked.
“What investors really want to see is a reliable fiscal trajectory,” said ING economist James Smith, whoever becomes prime minister next week.
Central government revenues were £71.2bn in September, £7bn more than in the same month last year due to higher tax revenues.
However, higher debt servicing pushed government spending to £79.3bn, £5.8bn higher than the same month last year.
September borrowings do not include measures such as the £400 energy bill rebate and the energy price freeze added to spending from October. These could result in a significant increase in borrowing for the remainder of the year.
https://www.ft.com/content/f5436753-3703-43e9-9b5c-9e1e56725c20 UK government borrowing jumps to £20bn in September