Reeves under pressure as UK govt borrowing hits highest in 5 years

(Sharecast News) - UK government borrowing last month rose to its highest amount in five years, according to official data published on Tuesday, putting pressure on Finance Minister Rachel Reeves ahead of her budget next week. Public sector net borrowing hit £20.2bn in September, up £1.6bn year on year, the Office for National Statistics said. Economists had forecast a figure of £20.8bn.

Borrowing in the current financial year was nearly £100bn - the second-highest amount since monthly records began in 1993, the ONS said. It is also £7.2bn more than the £92.6bn forecast by the Office for Budget Responsibility in March

This means Reeves is running out of her so called "fiscal headroom" meaning she will either have to raise taxes or cut spending to keep within her self-imposed rules to have debt falling in five years.

"Debt interest, the cost of providing public services and benefits all increased compared with last year, more than offsetting the rise in receipts from central government taxes and national insurance contributions," said ONS chief economist Grant Fitzner.

"Likewise, the first six months of the financial year saw the highest overall deficit since 2020," he added.

Reporting by Frank Prenesti for Sharecast.com