UK public sector borrowing soars more than expected

UK public sector borrowing greater than doubled in December, pushed up by greater debt curiosity funds and the federal government’s measures to assist households and companies with hovering power costs.

Public sector internet borrowing hit £27.4bn final month, up from a revised £10.7bn in the identical month in 2021 and the best December borrowing since month-to-month information started in 1993, in line with knowledge revealed by the Workplace for Nationwide Statistics on Tuesday.

The determine was a lot greater than the £17.7bn forecast by economists polled by Reuters and properly above the £17.6bn forecast in November by the Workplace for Funds Accountability, the UK fiscal watchdog.

Public borrowing rose “largely due to a pointy rise in spending on power help schemes and a rise in debt curiosity,” stated the ONS.

Larger curiosity on authorities debt price £17.3bn final month, the best December determine since month-to-month information started in April 1997.

“Proper now we’re serving to tens of millions of households with the price of residing, however we should additionally be certain that our degree of debt is truthful for future generations,” stated chancellor Jeremy Hunt.

The price of servicing authorities debt has risen sharply since mid-2021 largely because of greater inflation, with the curiosity payable on index-linked gilts rising consistent with the retail costs index.

Spending rose on the federal government’s insurance policies to assist households and companies cope with excessive power costs, together with the power payments help scheme.

Public sector borrowing within the monetary yr to December was £128.1bn, £5.1bn greater than that borrowed in the identical interval final yr, however £2.7bn lower than forecast by the OBR.