UK Budget Shortfall Overshoots Estimate
(RTTNews) - UK government borrowing increased more than expected and also exceeded the official estimate in August, adding pressure on Chancellor Rachel Reeves ahead of the November budget.
Public sector net borrowing increased GBP 3.5 billion from the last year to GBP 18.0 billion in August, the Office for National Statistics said Friday.
This was the highest August borrowing in five years and exceeded the official estimate of GBP 12.5 billion. Borrowing was also larger than economists' forecast of GBP 12.8 billion.
Current receipts grew by GBP 4.3 billion to GBP 84.3 billion in August. At the same time, expenditure rose GBP 7.8 billion to GBP 89.1 billion.
Nonetheless, at GBP 8.4 billion, the interest payable on central government debt was broadly in line with the GBP 8.5 billion forecast by the Office for Budget Responsibility in March.
In the financial year to August, the budget deficit totaled GBP 83.8 billion and marked the second highest April to August borrowing since records began in 1993, after that of 2020.
At the end of August, public sector net debt was estimated at 96.4 percent of GDP. It remained at levels last seen in the early 1960s.
"This government has a plan to bring down borrowing because taxpayer money should be spent on the country's priorities, not on debt interest," James Murray, chief secretary to the Treasury, said.
The Chancellor is set to deliver the Autumn budget on November 26. Reeves is widely expected to raise taxes and reduce borrowing in order to strengthen its fiscal position.
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