Government borrowing in December surges to £17.8 billion
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The government was forced to borrow more last month than in any December on record outside the emergencies of the financial crisis and the pandemic, latest official figures show today. Borrowing in the month more than doubled compared with the previous year to £17.8 billion, far beyond City forecasts.
This was the third-highest December borrowing since monthly records began in January 1993, behind only those of 2009, when it was £21.4 billion, and the £24.2 billion of December 2020. The size of the borrowing will add to jitters in the bond markets about the size of Britain’s national debt mountain and increase fears that Chancellor Rachel Reeves will have to cut public spending again to bring the public finances under control.
The Government’s borrowing needs were swelled by a huge increase in interest payments on existing Government debt. This rose to £8.3 billon largely because of higher than expected inflation, which means the Government has to pay out more to investors holding index linked gilts.
Other factors included a £2.9 billion rise in departmental services “as pay rises and inflation increased running costs” and a £2.2 billion hike in the benefit bill “ largely caused by inflation-linked increases in many benefits. Borrowing in the financial year to December 2024 was £129.9 billion; this was £8.9 billion more than at the same point in the last financial year and the second-highest financial year-to-December borrowing since monthly records began in January 1993.
