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Borrowing hits new record.

 Pub­lic sec­tor bor­row­ing soared to the highest Decem­ber fig­ure on record last month, driven by higher

Borrowing

interest pay­ments and also energy-aid meas­ures.—Pub­lic sec­tor bor­row­ing more than doubled last month to the highest Decem­ber fig­ure on record, driven by higher interest pay­ments and the meas­ures to help house­holds and busi­nesses with soar­ing energy prices.

Pub­lic sec­tor net bor­row­ing hit £27.4bn, up from a revised £10.7bn in the same month in 2021 and the highest Decem­ber fig­ure since monthly records began in 1993, accord­ing to the Office for National Stat­ist­ics yes­ter­day.

Pub­lic bor­row­ing rose «largely because of a sharp rise in spend­ing on energy sup­port schemes and an increase in debt interest», said the ONS.

A read­ing below 50 indic­ates the major­ity of busi­nesses repor­ted a con­trac­tion for the sixth con­sec­ut­ive month.

«Weaker than expec­ted PMI num­bers in Janu­ary under­score the risk of the UK slip­ping into reces­sion,» said Chris Wil­li­am­son, chief busi­ness eco­nom­ist at S&P Global Mar­ket Intel­li­gence. «The rising cost of liv­ing and higher interest rates all meant the rate of eco­nomic decline gathered pace again».

The pub­lic sec­tor bor­row­ing fig­ure was much higher than the £17.7bn fore­cast by eco­nom­ists polled by Reu­ters and well above the £17.6bn fore­cast in Novem­ber by the Office for Budget Respons­ib­il­ity, the fiscal watch­dog.

The cost of ser­vi­cing debt has risen sharply since mid-2021 primarily as a res­ult of higher infla­tion, with interest pay­able on index-linked gilts rising in line with the retail price index.

Spend­ing rose on the policies to help with high energy prices, includ­ing the energy bills sup­port scheme. In Decem­ber, expendit­ures rose to £91.2bn from £71.8bn in 2021.

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  1. Christine25 January 2023 at 11:53

    The UK is clearly heading for a recession this year. There is still some time to turn things around but I don't think it will happen.

    ReplyDelete

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