UK public sector borrowing rose by less than expected last month, despite the government’s measures to shield households and businesses from soaring energy prices.
Public sector net borrowing was £13.5bn in October, £4.4bn more than in the same month last year and the fourth highest October borrowing figure since monthly records began in 1993, according to data published by the Office for National Statistics on Tuesday.
However, the figure was much lower than the £22bn forecast by economists polled by Reuters.
Central government expenditure was £76.8bn in October, £6.5bn more than in the same month last year. But central government tax receipts were £51.7bn, which was £2.5bn more than in October last year, helping to reduce borrowing.
In October, government measures such as the energy bills support scheme, the energy price guarantee and the energy bill relief scheme, came into effect to help businesses and consumers with soaring energy costs.
Last week, the Office for Budget Responsibility, the UK fiscal watchdog, forecast that the UK public debt — or borrowing accumulated over time — would soar to a 63-year high of 97.6 per cent of GDP in 2025-26 because of more than £100bn of additional fiscal support over the next two years to cushion the blow of higher energy prices.
UK chancellor Jeremy Hunt said: “It is right that the government increased borrowing to support millions of business and families throughout the pandemic, and the aftershocks of Putin’s illegal invasion of Ukraine.”
Despite the government’s support, the OBR is forecasting a recession that will last for more than a year and will wipe out the past eight years of growth in living standards.