47 minutes agoShareSaveRachel ClunBusiness reporterShareSaveGetty ImagesUK government borrowing was higher than expected last month according to the latest official figures.Borrowing – the difference between public spending and tax income – was £17.4bn in October, down from £19.2bn in the same month last year, the Office for National Statistics (ONS) said.The borrowing figures come less than a week before Chancellor Rachel Reeves unveils her Budget, and she has previously confirmed both tax rises and spending cuts are on the table.ONS chief economist Grant Fitzner said while borrowing was down compared with the same month last year, it was “the third-highest October figure on record in cash terms”.However, borrowing was £1.8bn lower than in October last year.”While spending on public services and benefits were both up on October last year, this was more than offset by increased receipts from taxes and National Insurance contributions,” he said.Analysts had expected October borrowing to be £15bn, slightly higher than the Office for Budget Responsibility’s (OBR) March forecast of £14.4bn.In the financial year to October, borrowing was £116.8bn, which was £9bn more than the same seven-month period in 2024. It was the second-highest borrowing for April to October since records began in 1993, after 2020.Chief secretary to the Treasury James Murray said the government aimed to reduce borrowing over the course of the parliament, with £1 of every £10 in taxpayer money currently spent on paying interest on national debt.”That money should be going to our schools, hospitals, police and armed forces,” he said.”That is why we are set to deliver the largest primary deficit reduction in both the G7 and G20 over the next five years – to get borrowing costs down.”Shadow chancellor Sir Mel Stride said borrowing so far this financial year had been the highest on record outside the pandemic.”If Labour had any backbone, they would control spending to avoid tax rises next week,” he said.James Smith from investment bank ING said the figures would not be welcomed by the chancellor ahead of her Budget, but said her fiscal rules were about what happens later this decade, rather than the current picture.”Today’s data is not helpful, it shows that the government is borrowing more than expected, but it doesn’t necessarily change the decisions next week,” he told the BBC’s Today programme.Nick Ridpath, research economist at the Institute for Fiscal Studies, noted government borrowing for the year to date had continued to exceed forecasts from the OBR, “to the tune of around £10bn”.Mr Ridpath said that while the borrowing figures should not be given too much weight, ahead of the Budget they highlighted the uncertainty around pressures on spending and tax revenues and the “stubbornly high costs of servicing government debt”.The chancellor needs to find more money in her 26 November Budget to meet her self-imposed rules for government finances, which she has described as “non-negotiable”.The two main rules are:Not to borrow to fund day-to-day public spending by the end of this parliamentTo get government debt falling as a share of national income by the end of this parliamentThe BBC understands that newer assessments from the OBR have put the gap in public finances that Reeves needs to fill at £20bn.Mr Ridpath said: “Operating with minimal fiscal margin for error is risky, and this is one reason why the chancellor might sensibly take steps to increase her so-called ‘fiscal headroom’ at next week’s Budget.”Separate data from the ONS showed that over the month of October retail sales fell by 1.1% – the first monthly drop since May.”Supermarkets, clothing stores and online retailers all saw slower sales, with feedback from some retailers that consumers were waiting for November’s Black Friday deals,” Mr Fitzner said.Ruth Gregory, deputy chief UK economist at Capital Economics, said that together the latest government borrowing and retail sales figures painted a “pretty grim picture” of the economy.She noted the monthly fall in retail sales “isn’t quite as bad as it looks” as it comes off the back of four consecutive months of increases, but also said that consumer confidence had declined, which “suggests that consumers aren’t exac …
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[mwai_chat context=”Let’s have a discussion about this article:nn47 minutes agoShareSaveRachel ClunBusiness reporterShareSaveGetty ImagesUK government borrowing was higher than expected last month according to the latest official figures.Borrowing – the difference between public spending and tax income – was £17.4bn in October, down from £19.2bn in the same month last year, the Office for National Statistics (ONS) said.The borrowing figures come less than a week before Chancellor Rachel Reeves unveils her Budget, and she has previously confirmed both tax rises and spending cuts are on the table.ONS chief economist Grant Fitzner said while borrowing was down compared with the same month last year, it was “the third-highest October figure on record in cash terms”.However, borrowing was £1.8bn lower than in October last year.”While spending on public services and benefits were both up on October last year, this was more than offset by increased receipts from taxes and National Insurance contributions,” he said.Analysts had expected October borrowing to be £15bn, slightly higher than the Office for Budget Responsibility’s (OBR) March forecast of £14.4bn.In the financial year to October, borrowing was £116.8bn, which was £9bn more than the same seven-month period in 2024. It was the second-highest borrowing for April to October since records began in 1993, after 2020.Chief secretary to the Treasury James Murray said the government aimed to reduce borrowing over the course of the parliament, with £1 of every £10 in taxpayer money currently spent on paying interest on national debt.”That money should be going to our schools, hospitals, police and armed forces,” he said.”That is why we are set to deliver the largest primary deficit reduction in both the G7 and G20 over the next five years – to get borrowing costs down.”Shadow chancellor Sir Mel Stride said borrowing so far this financial year had been the highest on record outside the pandemic.”If Labour had any backbone, they would control spending to avoid tax rises next week,” he said.James Smith from investment bank ING said the figures would not be welcomed by the chancellor ahead of her Budget, but said her fiscal rules were about what happens later this decade, rather than the current picture.”Today’s data is not helpful, it shows that the government is borrowing more than expected, but it doesn’t necessarily change the decisions next week,” he told the BBC’s Today programme.Nick Ridpath, research economist at the Institute for Fiscal Studies, noted government borrowing for the year to date had continued to exceed forecasts from the OBR, “to the tune of around £10bn”.Mr Ridpath said that while the borrowing figures should not be given too much weight, ahead of the Budget they highlighted the uncertainty around pressures on spending and tax revenues and the “stubbornly high costs of servicing government debt”.The chancellor needs to find more money in her 26 November Budget to meet her self-imposed rules for government finances, which she has described as “non-negotiable”.The two main rules are:Not to borrow to fund day-to-day public spending by the end of this parliamentTo get government debt falling as a share of national income by the end of this parliamentThe BBC understands that newer assessments from the OBR have put the gap in public finances that Reeves needs to fill at £20bn.Mr Ridpath said: “Operating with minimal fiscal margin for error is risky, and this is one reason why the chancellor might sensibly take steps to increase her so-called ‘fiscal headroom’ at next week’s Budget.”Separate data from the ONS showed that over the month of October retail sales fell by 1.1% – the first monthly drop since May.”Supermarkets, clothing stores and online retailers all saw slower sales, with feedback from some retailers that consumers were waiting for November’s Black Friday deals,” Mr Fitzner said.Ruth Gregory, deputy chief UK economist at Capital Economics, said that together the latest government borrowing and retail sales figures painted a “pretty grim picture” of the economy.She noted the monthly fall in retail sales “isn’t quite as bad as it looks” as it comes off the back of four consecutive months of increases, but also said that consumer confidence had declined, which “suggests that consumers aren’t exac …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
