Last month’s increase in government borrowing to £22 billion was attributed to the epidemic and Russia’s invasion of Ukraine, according to Chancellor Jeremy Hunt.
The government borrowed the most money in November since records began in 1993, according to official figures.
According to estimates from the Office for National Statistics, net public sector borrowing, excluding public sector banks, totaled £22bn last month (ONS).
The amount increased by £13.9 billion compared to November 2021 and by approximately £9 billion compared to October.
As the energy bills support scheme continued to be implemented, interest payments increased to £7.3 billion.
The Energy Bills Support Scheme, which reimburses homeowners £400 over six months, cost the government £1.9 billion in November.
It also highlighted that the Energy Price Guarantee, which has limited household energy prices to £2,500, was the primary driver of a £4.7bn year-over-year increase in subsidies.
A year ago, interest rate payments were £2.4 billion less than they are now.
As prices rose due to inflation, so did the cost of government borrowing.
As the retail price index increased, so did the value of index-linked government bonds, or gilts. These index-linked gilts accounted for £4.2 billion of the government’s total interest rate payments last month.
Total public sector debt, excluding public sector banks, was $2,477.5 billion at the end of last month.
This is an increase of £125.9 billion compared to the same period last year but represents a smaller share of gross domestic product (GDP) – a measure of economic production. The amount of debt represents around 98.7% of GDP.
Pantheon Macroeconomics, an economic research organization, predicts that borrowing will continue to rise.
“We continue to anticipate that in future years, public borrowing will exceed the OBR’s (Office of Budget Responsibility) forecast,” the organization said.
The figures were attributed by Chancellor Jeremy Hunt to the epidemic and Russia’s invasion of Ukraine.
“Faced with the twin global emergencies of a pandemic and Putin’s war in Ukraine, we have taken substantial measures to support millions of businesses and families in the United Kingdom,” he said.
We have a clear plan to assist in halving inflation next year, but putting our public finances back on a sustainable foundation will involve some difficult choices.
The Institute of Chartered Accountants in England and Wales stated that there is cause for relief in the numbers despite the rising debt.
Chancellor Jeremy Hunt will be relieved that the deficit for the year-to-date has only exceeded £100bn by £5bn, keeping it on pace to remain within the Office for Budget Responsibility’s latest estimate of £177bn for the full year,” the report stated.
