UK September borrowing reaches 24.5 billion pounds as interest costs rise
The UK public sector borrowed 24.5 billion pounds in September, exceeding both last year’s level and the official forecast. Debt interest reached 10.9 billion pounds. Borrowing over the financial year’s first half remained below a year earlier, while the provisional stock of net debt crossed 3 trillion pounds.
Economics & Markets··Evening
September borrowing exceeds the forecast
The UK public sector borrowed 24.5 billion pounds in September, as spending grew faster than income. The monthly deficit was 1.8 billion pounds, or 7.7 per cent, above the same month a year earlier. It also exceeded the forecast of the Office for Budget Responsibility, the independent UK fiscal watchdog, by 1.9 billion pounds.[1], [2]
For April through September, borrowing totalled 97.8 billion pounds. That six-month figure was 4.4 billion pounds, or 4.3 per cent, below the equivalent period a year earlier, but 6 billion pounds above the official forecast. The current budget deficit reached 15.8 billion pounds in September and 64 billion pounds over the financial year so far.[1]
Debt interest reaches 10.9 billion pounds
Central government debt interest payable reached 10.9 billion pounds in September. That was an annual increase of 1.6 billion pounds, or 16.6 per cent, and 2 billion pounds more than forecast. The payment was the highest September total since the series began. Monthly debt interest had exceeded 10 billion pounds on only eight occasions.[1], [2]
Payments on some government bonds move with the retail prices index. The statistical agency said this inflation-linked effect added 4 billion pounds to September’s interest costs. Income-related tax receipts increased by more than 7 per cent from a year earlier and corporation tax receipts rose 9 per cent, but these increases did not offset the rising interest bill.[2]
Net debt crosses 3 trillion pounds
Public sector net debt was provisionally estimated at 3 trillion 5 billion pounds at the end of September, up 91.7 billion pounds over the year. The nominal stock crossed 3 trillion pounds for the first time. Relative to gross domestic product, however, it fell to 94 per cent, a decline of 0.7 percentage points from a year earlier.[1]
Net debt subtracts liquid assets from outstanding liabilities. Borrowing measures the deficit over a period, whereas debt is measured at the period’s end. The broader public sector net financial liabilities measure stood at 2 trillion 643.4 billion pounds, or 82.7 per cent of gross domestic product. That ratio increased 0.7 percentage points annually. The statistical agency cautioned that the debt estimate could be revised as additional information arrives.[1]
