Government borrows less than expected in September
Government borrowing in September was lower than most economists had expected.
Borrowing – the difference between spending and tax income – was £14.3bn last month, according to the Office for National Statistics (ONS).
This was £1.6bn less than a year earlier, but the sixth highest borrowing in September since monthly records began in 1993.
Economists had predicted borrowing to be £18.3bn last month.
Government debt was running at nearly £2.6 trillion, more than 2% higher than last year.
Chancellor Jeremy Hunt said: “We had to borrow during the pandemic to protect lives and livelihoods, but since then Putin’s invasion has pushed up inflation and interest rates.
“This means we spent twice as much on debt interest last year as we did the previous year.”
He added that this was “clearly not sustainable”.
Last week Mr Hunt said that higher interest rates were likely to cost the UK an extra £20bn to £30bn per year.
He has all but ruled out near-term tax cuts, saying the government needs to prioritise bringing down inflation.
But he is under pressure from some Conservative MPs to announce plans to lower taxes before the next general election, which will be held at the latest in January 2025.
This week the Institute for Fiscal Studies said the UK economy was in a “horrible fiscal bind” with no room to cut taxes or increase public spending amid mounting political pressure on Mr Hunt to do so.
Mr Hunt on Friday said that the UK needed to “get debt falling and reduce public sector waste so that those delivering public services can get back to what they do best; teaching our children, keeping us safe, and treating us when we’re sick”.
Since the Conservatives came to power in 2010, local government funding has been heavily cut, there have been large real-term cuts in education funding, and there are gaps in NHS funding.
Link: https://www.bbc.com/news/business-67166913