Lift for Rachel Reeves as UK borrowing hits three-year low
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November drop to £11.2bn a welcome figure for chancellor after backlash from business leaders to budget. The UK’s debt bill fell last month as government borrowing dropped to just over £11bn, giving Rachel Reeves an early Christmas present after a furious backlash from business leaders to her budget.
Official figures showed the interest payable on central government debt was £3bn, much lower than analysts expected and a decrease of £4.7bn from the same month in 2023, to give the lowest November figure since 2019. The Office for National Statistics said borrowing in November was £11.2bn, based on the longstanding measure of public sector net borrowing (PSNB), well below the £13bn City economists had forecast, and the lowest November borrowing in three years.
The figures are a fillip for Reeves, as she faces a backlash over tax-raising measures in the budget and gloomy growth forecasts for the UK economy. Lower borrowing costs and higher tax receipts helped bring down the deficit, while tax rises on businesses due next year should help further to improve the public finances.
Businesses have criticised measures announced in Reeves’s debut budget in October, including a rise in employer national insurance contributions designed to raise £25bn. However, some analysts warned that Reeves might need to embark on another round of belt-tightening if the economy failed to pick up and generate higher tax receipts.