UK Borrowing Jumps to £18.3 Billion in August as Debt Interest Hits Record £8.8 Billion
Updated
Updated · bbc.co.uk · Sep 22
UK Borrowing Jumps to £18.3 Billion in August as Debt Interest Hits Record £8.8 Billion
3 articles · Updated · bbc.co.uk · Sep 22
Summary
£18.3 billion in August borrowing came in above official forecasts and nearly 20% higher than a year earlier, intensifying pressure on Chancellor John Healey before his first Budget on 28 October.
3.1% inflation in August lifted spending on public services, benefits and other costs faster than tax receipts, while debt-interest payments rose to a record £8.8 billion for any August since records began in 1997.
Economists said the figures worsen an already weak backdrop, with higher borrowing costs and a softening economy raising the risk that Prime Minister Andy Burnham's policy plans are delayed or scaled back.
£15 billion of tax rises or other measures may be needed to fund defence and cost-of-living support while staying within fiscal rules, as inflation-linked debt keeps pressure on the public finances.