The scale of the task facing Rachel Reeves next week in her Budget speech was underlined today by public finance figures showing the Government was forced to borrow £16.6 billion in September.
The deficit was £2.1 billion more than the same time last year and the third biggest on record for the month, exceeded only by the two Covid years of 2020 and 2021.
The Government was forced to pay out £5.6 billion in debt interest during the month, a huge £4.6 billion increase on last year, although the 2023 figure was artificially depressed by movements in the Retail Price Index at the time, according to the Office for National Statistics.
Borrowing in the financial year to date has now reached £79.6 billion, just £1.2 billion more than at the same point in the last financial year but still the third highest year-to-September borrowing since monthly records began in January 1993.
It is also £6.7 billion more than the £73 billion forecast by the Office for Budget Responsibility for this period.
Public sector net debt excluding public sector banks was estimated at 98.5% of GDP, four percentage points more than at the end of September 2023, and remains at levels last seen in the early 1960s.
Central government receipts were £80.7 billion in the month £3.3 billion more than in September 2023, but spending was £93.7 billion up £5.5 billion.
Darren Jones, Chief Secretary to the Treasury said: “We have inherited a £22 billion black hole in the country’s public finances, including no plan to fund pay deals for millions of public sector workers. Strikes cost at least £3 billion last year, so it was the right thing to do to end those damaging disputes. Resolving this blackhole at the Budget next week will require difficult decisions to fix the foundations of our economy and begin delivering on the promise of change.”
