LONDON (Reuters) -Britain’s government borrowed more last month than in any December since monthly records began 30 years ago, reflecting the huge cost of energy support, soaring debt interest linked to rising inflation.
The Office for National Statistics (ONS) said public sector net borrowing, excluding state-owned banks, was 27.4 billion pounds ($33.97 billion) in December, up from 10.7 billion pounds a year earlier.
A Reuters poll of economists had pointed to borrowing of 17.75 billion pounds for December.
The ONS said the large figure for borrowing in December was “largely because of a sharp rise in spending on energy support schemes and an increase in debt interest.”
“Overall, today’s worse-than-expected public finances figures will only embolden the Chancellor in the Budget on March 15 to keep a tight grip on the public finances,” Ruth Gregory, an economist at Capital Economics, said.
She added that finance minister Jeremy Hunt would likely need to wait until closer to the next general election – due in January 2025 at the latest – before he can announce tax cuts.
Debt interest accrued by the government in December totalled 17.3 billion pounds, the highest figure for the month since monthly records began and reflecting the impact of double-digit inflation on index-linked government bonds.
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Borrowing for December was some 9.8 billion pounds more than the 17.6 billion pounds forecast by the Office for Budget Responsibility (OBR).
However, almost all of the difference reflected a revaluation of student loans last year, incorporated into the OBR’s forecasts but not yet shown in the ONS data.
The ONS said it would record the revaluation once more definitive estimates were available.
An ONS statistician said the true gap between the ONS and OBR estimates was likely only about 1.2 billion pounds, if they were to account for student loans in the same way. ($1 = 0.8065 pounds)
(Reporting by Andy Bruce and Sachin Ravikumar and Kate Holton)
Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.
