Highest government borrowing in September for five years

UK government borrowing in September reached £20.2bn, the highest figure for that month in five years, according to the Office for National Statistics (ONS). This increase of £1.6bn compared to the previous year was driven by higher debt interest payments, which offset an increase in government revenue from taxes and national insurance. For the first six months of the financial year, total government borrowing stands at £99.8bn, an £11.5bn rise from the same period last year. These borrowing figures place significant pressure on Chancellor Rachel Reeves as she prepares for the upcoming Budget. While September's borrowing was slightly lower than some analyst expectations, it exceeded the forecast from the Office for Budget Responsibility. Economists suggest that achieving higher tax receipts, a key factor for the chancellor, will depend on stronger economic growth. Projections indicate the government may need to raise approximately £27bn in the Budget, with household taxes likely to be the primary source. In an effort to stimulate economic growth ahead of the Budget, the government has announced measures to reduce regulatory burdens on businesses, which are claimed to save companies nearly £6bn annually. However, increased government spending, attributed to pay rises, inflation impacting daily operating costs, and inflation-linked state benefits, contributed to the higher borrowing. The government also incurred £9.7bn in debt interest payments, a substantial increase from the previous year. Public sector debt remains at approximately 95.3% of GDP, a level not seen since the early 1960s. Government officials have stated their commitment to reducing borrowing ... download the app to read more