UK public sector borrowing rises greater than anticipated

UK public sector borrowing greater than doubled in December, boosted by increased debt curiosity funds and authorities motion to assist households and companies within the face of hovering vitality costs.

Public sector web borrowing hit £27.4bn final month, up from a revised £10.7bn in the identical month in 2021 and the very best December borrowing since month-to-month data started in 1993, in accordance with knowledge launched Tuesday by the Workplace for Nationwide Statistics.

The determine was nicely above the forecast of £17.7bn by economists polled by Reuters and nicely above the forecast of £17.6bn in November by the Workplace for Finances Duty, the watchdog UK finances.

Authorities borrowing elevated “largely resulting from a pointy enhance in spending on vitality assist packages and a rise in curiosity on debt”, the ONS mentioned.

Rising curiosity on public debt value £17.3billion final month, the very best December determine since month-to-month data started in April 1997.

“Proper now we’re serving to tens of millions of households with the price of residing, however we additionally want to verify our stage of debt is truthful for future generations,” Chancellor Jeremy Hunt mentioned.

The price of servicing public debt has risen sharply since mid-2021, largely resulting from rising inflation, with curiosity payable on index-linked gilts rising in keeping with the retail worth index.

Spending rose on authorities insurance policies geared toward serving to households and companies address excessive vitality costs, together with the Vitality Invoice Assist Scheme.

Public sector borrowing within the yr to December was £128.1bn, £5.1bn greater than borrowed in the identical interval final yr, however 2.7 billion kilos lower than anticipated by the OBR.