UK public sector borrowing more than doubled in December, buoyed by government action to support households and businesses amid rising energy prices and higher debt interest payments.
Public sector net borrowing reached £27.4 billion last month, up from £10.7 billion in the same month in 2021 and the highest December borrowing since monthly records began in 1993, according to the Office for National Statistics data released on Tuesday.
The number was much higher than the £17.7 billion forecast by economists polled by Reuters and well above the £17.6 billion forecast in November by the Office for Budget Responsibility, the UK financial regulator.
Public borrowing increased “mainly due to a sharp increase in spending on energy support programs and a rise in debt interest rates,” the ONS said.
Higher rates on government debt cost £17.3 billion last month, the highest December figure since monthly records began in April 1997.
“Right now we’re helping millions of families with the cost of living, but we also need to make sure our debt is fair for future generations,” said Chancellor Jeremy Hunt.
The cost of servicing debt has risen sharply since mid-2021, mainly due to higher inflation, with interest paid on index-linked government bonds rising in line with the retail price index.
Spending on government measures to support households and businesses facing high energy prices, such as B. the program to support energy bills, also led to an increase in borrowing.
Public sector borrowing was £128.1 billion in the year to December, up £5.1 billion from the same period last year but £2.7 billion less than the OBR forecast.
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