London Daily

Focus on the big picture.

Government borrowing sharply higher than expected

Government borrowing sharply higher than expected

Benefits, energy schemes and interest rates make government borrowing higher than expected in April.
The state borrowed nearly £12bn more last month than in April last year as it spent on energy schemes, higher benefits payments and paid billions more on interest rates, according to official figures.

Monthly borrowing increased to £25.6bn in April, up from £21.5bn in March and £13.7bn in April 2022, data from the Office of National Statistics (ONS) shows.

This means the public sector, excluding public sector banks, spent more than it received in taxes and other income and borrowed the shortfall.

The April figure is far higher than the £19.8bn economists had forecast and is the second most expensive April since monthly records began in 1993.

Behind the rise is the increased cost of servicing debt as interest rates have consistently been raised to make borrowing more expensive. The Bank of England has been hiking rates in an effort to bring down persistent double digit inflation.

Interest rate payments by central government are up nearly 50% and reached £9.8bn in April 2023, up £3.1bn from a year ago.

Benefits payments too increased during the month in line with the inflation rate of 10.1% recorded in January.

However, public sector debt as a proportion of gross domestic product (GDP), a measure of economic output and activity, has decreased from 99.6% to 99.2% of GDP.

It's still the highest figure in more than 60 years. Not since the 1960s has the net debt been this high.

Borrowing is high after periods of large state spending, such as on wars or pandemic measures.

Chancellor Jeremy Hunt said: "It is right we borrowed billions to protect families and businesses against the impacts of the pandemic and Putin's energy crisis.

"But debt and borrowing remain too high now - which is why it's one of our priorities to get debt falling. We've taken difficult but necessary decisions to balance the nation's books, and if we stick to our plan and get our economy growing, then debt is set to fall."

Economic research firm Pantheon Macroeconomics said the Office of Budget Responsibility (OBR), who are tasked with providing independent economic forecasts, are correct in their prediction that public borrowing will reach £131.6bn in the 2023-2024 year.

The forecast is "still in the right ballpark, given that both GDP and interest payments look set to surprise the OBR's assumptions to the upside".

"We doubt, however, that public borrowing will fall to the low levels in the medium term predicted by the OBR last month. The OBR is too upbeat about the economy's medium-term economic outlook," Pantheon's chief economist said.
Newsletter

Related Articles

0:00
0:00
Close
South Korea's Brief Declaration of Martial Law
Unidentified Drones Spotted Over UK Airbases
Israel Offers $5 Million for Each Gaza Hostage Freed
"We Need A British Trump"- Former Prime Minister Elizabeth Truss
Make Orwell fiction again
CIA Official Arrested for Leaking Intelligence on Israel-Iran Conflict
Special counsel Jack Smith asks the court to dismiss his appeal regarding Trump in the Mar-a-Lago classified documents case.
BORIS: UK May Deploy Troops If Trump Cuts Support to Ukraine
Trump Administration Taking Shape: No Invitations Issued to Nikki Haley or Mike Pompeo
Iranian Man Charged in Plot to Assassinate Donald Trump
£3 Billion of British Taxpayer Money Spent by UK Government on Hotel Costs for Migrants
Unlike the shock and profound sadness at 10 Downing Street, British citizens assembled for an impressive rally backing the elected President of the United States, Donald Trump.
Elon Musk Predicts Justin Trudeau's Electoral Defeat
Here's why: Scott Presley convinced swing voters in Pennsylvania with a clear and direct question.
Royal Estates Earning Millions from Public Services and Charities
Siemens Acquires Altair Engineering in $10.6 Billion Deal
The man who got hit by a bus and immediately went back to the pub is strong! Beer is very important.
Donald Trump files $10 billion lawsuit against CBS News, accusing them of 'deceptively doctoring' Kamala Harris' '60 Minutes' interview
Formal Address for Meghan Markle at Invictus Games
Understanding the US Electoral College System
Apple Launches AI Features on Select iPhones
JP Morgan Sued Customers Over Viral Cheque Fraud Scheme
King Charles to Continue Global Tours Despite Cancer Diagnosis
Venice Extends Tourist Entry Fee Program to 2025
Tommy Robinson Charged Under Terrorism Act for Phone Offence
Plans to Increase Employers' National Insurance Announced
Washington Post Editor-at-Large Robert Kagan has RESIGNED after owner Jeff Bezos BARRED the endorsement of Kamala Harris.
Massive Theft of Artisan Cheddar from Neal’s Yard Dairy
US Man Charged with Murder of Co-Worker over Breaks
Carbon Monoxide Incident Claims Lives at UK Care Home
Birmingham Airport Evacuated Due to Suspicious Vehicle
Former US President Barack Obama raps the lyrics to Eminem's ‘Lose Yourself’ after the rapper introduces him at a Kamala Harris rally in Detroit
KYIV URGES NORTH KOREAN TROOPS IN UKRAINE TO SURRENDER
Ofcom Identifies Link Between Social Media Posts and UK Unrest
Russian Boxer Receives Lifetime Ban for Illegal Move in Boxing Debut
Biden Labels Trump a Threat to Democracy
McDonald's Linked to E. coli Outbreak Leading to One Death
Teacher Enoch Burke arrested at Wilson’s Hospital School in Ireland after refusing to endorse and affirm transgender ideology.
FBI Investigates Leak of US Intelligence on Israeli Strike Plans
Israeli Airstrike Targets Hezbollah's Financial Resources
China’s Baidu is revolutionizing transportation with its robotaxi service
Angela Rayner Secures Permanent Seat on UK National Security Council
Russian Ambassador Claims UK's Proxy War in Ukraine
Doctor Advocates for Assisted Dying Law Reform
Ruth Davis Appointed as UK’s First Nature Envoy
Pressure Mounts on Starmer to Discuss Reparations at Commonwealth Summit
James Cleverly’s Costly In-Flight Catering for Government Trips
AI Regulation Takes Center Stage in 2024 US Presidential Campaign
NASA Study Explores Potential Microbial Life Beneath Mars' Ice
Cats: The Liquid-Like Pets
×