Borrowing surges by more than forecast in blow to Chancellor
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Chancellor Rachel Reeves is facing further pressure over Britain’s public finances after official figures showed a bigger-than-expected surge in government borrowing last month to nearly £18 billion. The Office for National Statistics (ONS) said public sector net borrowing stood at £17.8 billion last month – the third highest for any December on record.
Borrowing was £10.1 billion higher than the same month last year and more than the £14.1 billion expected by most economists. The ONS said the figure was driven higher largely by soaring debt interest payments, which rose £3.8 billion year on year due to higher Retail Prices Index inflation.
Borrowing in the financial year so far is £129.9 billion, £8.9 billion more than the same period a year earlier and the second-highest financial year-to-December borrowing since monthly records began – only outstripped by the mammoth borrowing seen at the height of the pandemic in 2020.
Borrowing in the year to date is £4.1 billion more than the £125.9 billion forecast by the independent fiscal watchdog, the Office for Budget Responsibility (OBR). It comes after volatility in the UK government bond market at the start of the year, which sent public sector borrowing costs soaring, and led to fears that Ms Reeves is on track to miss her fiscal rules.
