News Update


Borrowing by the government grows ahead of the Autumn Statement.

However, the statistics revealed a smaller-than-expected deficit in the first half of the fiscal year.

This was because previous months’ tax receipts were larger, reflecting increasing wages and inflation.

It comes as speculation grows that the chancellor’s Autumn Statement on Wednesday would include tax cuts.

Spending on cost of living payments and higher interest on public debt – the most in any October since monthly records began – resulted in a worse imbalance in the public finances than at the same period last year.

Borrowing was up £4.4 billion year on year and the second highest total for October, trailing only the figure for 2020, when spending was hit by the pandemic.

The borrowing total was also greater than the £13.7bn anticipated by the UK’s independent fiscal watchdog, the Office for Budget Responsibility (OBR).

It was the first time this fiscal year that borrowing exceeded the OBR’s forecasts.

However, higher-than-expected tax receipts earlier in the fiscal year resulted in a smaller overall deficit than the OBR predicted at the time of the spring Budget.

According to the ONS, the government has borrowed a total of £98.3 billion since the start of the fiscal year. That is £21.9 billion more than a year ago, but less than the £115.2 billion anticipated by the OBR in March.

In response to the new borrowing figures, Chancellor Jeremy Hunt stated that he would continue to work with the Bank of England to reduce inflation to 2%.

“That means being responsible with the nation’s finances,” he said.

On Tuesday, Bank of England governor Andrew Bailey told the Treasury Committee that inflation was on pace to return to the Bank’s target of 2%.

However, he warned that meeting the objective would take time, and that there was a possibility that inflation would remain high.


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