Borrowing Hits £24.5bn and Debt Passes £3 Trillion
The government borrowed £24.5bn in September, £1.9bn above the official forecast and the most in any single month since March 2021. Debt interest alone came to £10.9bn, the highest September figure since records began in 1997. Public sector net debt is provisionally estimated to have passed £3 trillion for the first time.
The figures cut both ways and the choice of half decides the story. Against the government: September overshot the forecast by £1.9bn, debt interest overshot by £2bn, and the financial year so far has run £6bn above forecast. In its favour: borrowing of £97.8bn since April is £4.4bn lower than at the same point last year, and debt as a share of the economy — the measure the fiscal rules are judged against — fell to 94.0%, seven tenths of a point down on the year, even as the cash total crossed £3 trillion. That total is a provisional estimate and may be revised. The mechanism connecting this to the Gulf is worth stating plainly: war-driven fuel prices feed the retail prices index, which sets the capital uplift on index-linked gilts, and a 0.6% rise in that index between June and July added £4bn to September’s interest bill on its own. Ruth Gregory of Capital Economics said the numbers “painted a dismal picture” and expects a cautious Budget that leaves “the toughest fiscal choices for next year”.