Financial News: UK Budget Deficit Widens More Than Estimated

UK Budget Deficit Widens More Than Estimated

10/22/2024 - 04:24:00 (RTTNews)

(RTTNews) - The UK budget deficit widened more than officially estimated in September and also hit the highest level for the month since 2021, the Office for National Statistics reported Tuesday.

Public sector net borrowing increased to GBP 16.6 billion in September from GBP 14.5 billion in the previous year. This was the third highest September borrowing since monthly records began in January 1993.

Data suggested that the government borrowing was higher than the GBP 15.1 billion forecast by the Office for Budget Responsibility. However, this was below economists' forecast of GBP 17.4 billion.

The interest payable on central government debt increased by GBP 4.6 billion from the last year to GBP 5.6 billion in September. This increase reflects the exceptionally low payment in September 2023 because of movements in the retail price index, rather than September 2024's interest being unusually high.

In the financial year to September, borrowing rose by GBP 1.2 billion to GBP 79.6 billion. This was the third highest year-to-September borrowing since monthly records began in January 1993. The OBR had estimated a deficit of GBP 73.0 billion for this period.

"While tax revenue increased, this was outweighed by increased spending, partly due to higher debt interest and public sector pay rises," said ONS deputy director for public sector finances Jessica Barnaby.

Chancellor Rachel Reeves is set to deliver the Autumn Budget 2024 on October 30. The budget is expected to hike taxes and reduce spending worth GBP 40 billion.

Chief Secretary to the Treasury Darren Jones said the budget would require difficult decisions to fix the foundations of the economy and begin delivering on the promise of change.

ONS data showed that public sector net debt excluding banks was estimated at 98.5 percent of gross domestic product at the end of September.

Central government net cash requirement was GBP 13.2 billion in September, which was GBP 1.9 billion less than in September 2023.

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