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UK Borrowing Gap Puts Pressure on Healey’s October Budget
The UK government borrowed more money than expected in the first five months of the financial year.
It borrowed £18.3bn in August alone.
This was £3.5bn more than the official forecast.
Overall, borrowing was £8.1bn higher than expected.
The government received more income-tax money, but its costs rose faster.
Inflation increased spending on public services and benefits.
Higher interest rates also made government debt more expensive to manage.
This may leave Chancellor John Healey with less money to use in his Budget.
He is expected to explain his plans on October 28 while following the government’s fiscal rules.
UK government borrowing reached £18.3bn in August, £3.5bn above the OBR forecast.
Borrowing from April to August totaled £77.3bn, £8.1bn above expectations.
Inflation-driven spending and debt-interest costs outweighed stronger self-assessed income-tax receipts.
Public sector net debt reached £2,985.5bn, equal to 93.8% of GDP.
The figures could reduce John Healey’s fiscal room before the October 28 Budget.
- Who
- The UK government and Chancellor John Healey.
- What
- Government borrowing exceeded forecasts by £8.1bn between April and August.
- Where
- The United Kingdom.
- When
- The figures cover the first five months of the financial year; the Budget is due on October 28.
- Why
- Higher spending, inflation-linked costs, and debt-interest payments outweighed stronger tax receipts.
Key facts
- August borrowing
- £18.3bn, or £3.5bn above the OBR forecast
- April-August borrowing
- £77.3bn, £8.1bn above the March forecast
- Current budget deficit
- £51.9bn through August, £4.8bn above forecast
- Self-assessed income tax
- £18.6bn in July and August, £1.9bn more than the same period last year
- Public sector net debt
- £2,985.5bn at the end of August
- Debt as a share of GDP
- 93.8%
- Budget date
- October 28
Sources
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