UK government borrowing grows in October

UK public sector borrowing rose to £8.0bn in October, official figures show, up £500m from a year earlier.

The figure comes a day before the Budget, and the monthly deficit was bigger than economists had predicted.

Increased debt costs, linked to the UK’s higher inflation since the Brexit vote, were a factor in the shortfall.

The Office for National Statistics (ONS) said borrowing for the financial year to date has reached £38.5bn, down £4.1bn from the same period last year.

That figure suggests borrowing is on track to come in below the Office for Budget Responsibility’s forecast of £58.3bn for the financial year as a whole.

Chancellor Philip Hammond will present the latest Budget on Wednesday. He has to balance calls for more government spending against the prospect of weaker future economic growth, which could affect tax revenues.

Announcing the latest borrowing figures, the ONS said: “In October 2017, the debt interest paid by central government was £6bn, while this represents the highest October interest payment on record it remains less than the highest recorded monthly payment of £7.2bn in April 2017.

“This increase in debt interest payment is largely due to the movements in the level of the Retail Prices Index.”

The rate of inflation as measured by the Retail Prices Index stood at 4% in October.

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Economy, General