Government borrowing was higher than expected and consumers tightened their belts, spending less than anticipated, official figures show.
Government borrowing rose to the third-highest October level since records began in 1993, though less than a year ago, according to the Office for National Statistics (ONS).
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It’s the last assessment of public finances we’ll get before Chancellor Rachel Reeves makes her budget announcement next week. It showed spending on benefits and public services was up, which was offset by higher tax takes.
Expensive borrowing
Billions were spent on borrowing money last month, with interest payments costing central government £8.4bn.
Reacting to the figures, the chancellor’s deputy, James Murray, said, “Currently we spend £1 in every £10 of taxpayer money on the interest of our national debt.
“That money should be going to our schools, hospitals, police and armed forces. That is why we are set to deliver the largest primary deficit reduction in both the G7 and G20 over the next five years – to get borrowing costs down.”
While the numbers won’t have a direct effect on the budget, with figures already submitted, it illustrates the difficult backdrop facing the chancellor, who’s committed to maintaining her self-imposed fiscal rules to bring down government debt and balance the budget by 2030.
As a result of the fiscal bind, tax rises are widely expected to be announced next week.
A slowdown in sales
Public sector net borrowing reached £17.43bn, above the £15bn forecast by economists polled by Reuters.
Retail…
