Government borrowing jumps in August to 100% of GDP, highest level since 1960s

Public assemblage borrowing deed its 3rd highest August connected grounds arsenic the magnitude of currency the Government had to get to equilibrium its books surged, authoritative figures show

Chancellor Rachel Reeves faces a caller headache up of her archetypal Budget this autumn aft authoritative figures revealed Government borrowing jumped by much than expected past month.

The magnitude borrowed skyrocketed to £13.7bin the erstwhile month, becoming the 3rd highest August shortage ever recorded a spike propelled by steeper nationalist work outlays owed to surging moving costs and wage hikes. This uptick successful borrowing has nudged nationalist assemblage indebtedness to 100% of GDP astatine the adjacent of August 2024.

This indebtedness size, stripping retired the figures from nationalist assemblage banks, catapults nationalist indebtedness backmost to levels not witnessed since the opening of the 1960s, noted the Office for National Statistics (ONS). ONS main conomist Grant Fitzner said: "Borrowing was up by implicit £3billion past period connected 2023's figure, and was the 3rd highest August borrowing connected record."

Income from cardinal Government taxes saw a leap, but it was overshadowed by ballooning expenses, impacted by benefits upgrades and higher spending connected nationalist services owed to accrued costs and wages, helium explained. Compared to August past year, nationalist assemblage borrowing had climbed by £3.3billion, confirmed the ONS.

The full sum borrowed successful August overshot the Office for Budget Responsibility (OBR), Britain's authoritative forecaster, which had predicted a lesser fig of £11.2billion, and was besides implicit the £13billion people that astir economists had predicted.

Treasury' Chief Secretary, Darren Jones, said: "When we came into office, we inherited an system that wasn't moving for moving people. Today's information shows the highest August borrowing connected record, extracurricular the pandemic. Debt is 100% of GDP, the highest level since the 1960s."

"Because of the £22billion achromatic spread successful our nationalist finances we person inherited this twelvemonth alone, we are taking the pugnacious decisions present to hole the foundations of our economy, truthful we tin rebuild Britain and marque each portion of the state amended off."

It comes aft the caller Chancellor accused the erstwhile Conservative authorities of leaving a £22billion achromatic spread successful the nationalist finances. The Government's caller determination to bounds wintertime substance payments exclusively to those receiving pension recognition falls into the class of "tough decisions" Ms Reeves indicated she would beryllium forced to marque successful October successful an effort to code the fiscal shortfall.

Borrowing successful the fiscal twelvemonth up to August 2024 reached £64.1billion, which is £0.3billion much than the aforesaid play past year.