Government borrowing last month was the highest in five years, official figures show, exacerbating the challenge facing Chancellor Rachel Reeves
Not since 2020, in the early days of the COVID-19 pandemic with the furlough scheme ongoing, was the August borrowing figure so high, according to data from the Office for National Statistics (ONS).
Money blog: Borrowers warned of wider market risk
Tax and national insurance receipts were “noticeably” higher than last year, but those rises were offset by higher spending on public services, benefits and interest payments on debt, the ONS said.
It meant there was an £18bn gap between government spending and income, a figure £5.25bn higher than expected by economists polled by Reuters.
A political headache
It compounds the problem for Ms Reeves as she approaches the November budget.
Her self-imposed fiscal rules say she must bring down government debt and balance the budget by 2030.
Responding to the figures, Ms Reeves’s deputy, chief secretary to the Treasury, James Murray, said: “This government has a plan to bring down borrowing because taxpayer money should be spent on the country’s priorities, not on debt interest.
“Our focus is on economic stability, fiscal responsibility, ripping up needless red tape, tearing out waste from our public services, driving forward reforms, and putting more money in working people’s pockets.”
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the fullest version.
You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.
