The UK government borrows more than expected
The UK government had to borrow more than expected last month as inflation increased and increased debt interest payments.
The Bureau of National Statistics has confirmed that the government’s fiscal deficit has fallen from £26 billion to £20.5 billion compared to the same month a year ago as the UK economy recovered from the pandemic.
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However, the positive impact on national debt was offset by causing interest payments on national debt, with inflation rising 84% year-on-year.
“In August, numbers were going the right way, far less than what the government spent, but borrowing numbers overturned expectations. Danni Hewson of AJ Bell Financial Analyst said , states:
One of the greatest successes and one of the biggest costs is the government’s Farrow scheme, which is currently dying days.
“Expenses on the August scheme were just over £1 billion, down almost 70% compared to the same time last year.
“All support has a substantial price tag on all limits, and the deficit could be lower than official forecasts. The Prime Minister has a wiggle room of touch that goes into the fall budget more than expected. It may be that there is concern.”
Inflation is not just something that flinches us when we reach supermarket checkout, but also puts a strain on our public wallets.
Hewson said: “Given the latest RPI figures, interest payments on all debts shot in August and September are even more painful. And drugs for inflation are widely accepted as going that path. This is an increase in interest rates from the Bank of England, and will also increase the costs of receivables.”
