Government Borrowing Hits the Ceiling Amid Sky‑High Interest
According to the latest numbers from the Office for National Statistics (ONS), the UK’s government just pulled out a staggering £17.4 billion in borrowing for October – the second‑biggest haul since the office started keeping track in 1993.
Borrowing Above Forecast
- Expected: £13.3 billion
- Actual: £17.4 billion
Economists are already feeling the crunch. Rachel Reeves – the Finance Minister – has “little wiggle room,” they say, especially after the debt interest exploded to a record £9.1 billion this month.
Interest That Keeps Growing
Debt interest reached an all‑time high last month, adding another layer of pressure to the already tight budget.
Spend vs. Revenue: The Tale of Demotivation
ONS deputy director for public‑sector finances, Jessica Barnaby, warned that although tax receipts jumped thanks to a cut in National Insurance rates, expenditures trailed behind by a sizeable margin. She highlighted:
“Our spending on public services, benefits and debt interest costs all rose compared to last year, meaning we spent more than we earned.”
Spending Numbers
- Overall spending last month: £88.5 billion
- Increase from last year: £3.9 billion
Fiscal Tightrope: How We’ll Walk It
Chief Secretary to the Treasury Darren Jones reassured the public that the government won’t play fast and loose with finance. He added:
“Our new robust fiscal rules will bring stability, bring debt down, and still give us the room to invest for growth.”
Economist’s Take
Capital Economics’ Alex Kerr said the numbers confirm the Chancellor’s limited flexibility:
- Day‑to‑day spending is projected to rise just 1.3 % in real terms between 2026‑27 and 2029‑30.
- Only £9.9 billion of fiscal headroom remains after the latest budget, suggesting any further increase in spending would likely require a tax hike.
Overall, October’s borrowing figures are a stark reminder that the UK’s fiscal future isn’t as flexible as it might seem – and that the policymakers are tightening the purse strings while still trying to keep the economy humming.
