UK public borrowing hits record £22b in November

BRITISH public borrowing rose to its highest for any November since records began, at £22.017 billion (S$36.2 billion), reflecting higher costs for energy subsidies, figures from the Office for National Statistics (ONS) showed on Wednesday (Dec 21).

Economists polled by Reuters had forecast public sector net borrowing, excluding state banks, of £13.0 billion for the month.

Public borrowing for the first eight months of the financial year, from April to November, totalled £105.4 billion, up by 7.6 billion from the same period in 2021.

The government’s Office for Budget Responsibility (OBR) forecast last month that borrowing would reach £177 billion this financial year, equivalent to 7.1 per cent of gross domestic product (GDP), and remain high at 5.5 per cent of GDP in 2022/23.

Samuel Tombs, chief UK economist at Pantheon Economics, said that full-year public borrowing looked on course to hit the OBR’s forecast for 2022/23, but risked overshooting in future years.

“The rolling nature of the (government’s) new fiscal targets, and building demographic pressure, suggest that plans for very modest real-terms increases in departments’ budgets in the mid-2020s will not be followed,” he said.

Public sector net debt, excluding state banks, rose to 98.7 per cent of GDP in November from 98.2 per cent in October, equivalent to £2.478 trillion in cash terms.

The ONS said new energy subsidies accounted for roughly £7 billion of the extra borrowing in November, while debt-interest costs rose by £2.4 billion to £7.3 billion from a year earlier.

National insurance receipts also grew more slowly than earlier in the year, after April’s increase in the rate of the payroll tax was reversed. REUTERS