UK government borrowing rises to £24.5bn as John Healey prepares for budget
Summary
The UK government borrowed £24.5 billion in September, more than expected, due to higher interest costs on debt driven by inflation. Rising energy prices linked to the Iran war increased payments on government bonds tied to inflation, pushing debt interest to the highest September level on record.Key Facts
- The UK government ran a budget deficit of £24.5 billion in September.
- Government paid £10.9 billion in interest on debt in September, the highest for that month ever recorded.
- Some government bonds are linked to inflation measured by the Retail Prices Index (RPI), which recently increased due to higher energy costs caused by the Iran war.
- The inflation rise added £4 billion to debt interest payments in September.
- Total government debt is estimated to have reached £3 trillion for the first time.
- Debt as a share of the UK economy is 94%, slightly lower than last year’s 95%.
- Public sector borrowing so far this year is £97.8 billion, which is £4.4 billion less than the previous year but £6 billion higher than expected.
- John Healey, the upcoming Chancellor, is expected to reduce the financial buffer against fiscal rules established by his predecessor Rachel Reeves.
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