The UK government borrowed a staggering £3.1billion, significantly higher than anticipated and more than double the amount borrowed in the same month last year. This figure marks the highest level of borrowing for July since 2021, showing the ongoing financial challenges faced by the country.
The Office for National Statistics (ONS) reported that the surge in borrowing was primarily driven by increased spending on public services and welfare. Jessica Barnaby, the ONS deputy director for public sector finances, explained, "July borrowing was almost £2bn higher this year than in 2023.
Revenue was up on last year, with income tax receipts in particular growing strongly. However, this was more than offset by a rise in central government spending where, despite a reduction in debt interest, the cost of public services and benefits continued to increase."
The UK's public finances are typically robust in July due to the boost from income tax self-assessment returns. However, this year, the government had to borrow £3.1billion to cover the gap between revenue and spending, compared to £1.3billion in July 2023.
Darren Jones, the Chief Secretary to the Treasury, commented on the situation, stating, "Today’s figures are yet more proof of the dire inheritance left to us by the previous government. A £22bn black hole in the public finances this year, a decade of economic stagnation and public debt at its highest level since the 1960s, with taxpayers’ money being wasted on debt interest payments rather than on our public services."
The July figures mean that, in the first four months of the 2024-25 financial year, the UK has borrowed a total of £51.4billion, about £5billion more than expected. The Office for Budget Responsibility (OBR) had forecasted borrowing for the entire financial year to be £87billion, but the deficit is now £4.7billion higher than their prediction.
Chancellor Rachel Reeves acknowledged the tough budgetary decisions ahead, stating, "We are taking the tough decisions that are needed to fix the foundations of our economy, modernise our public services and rebuild Britain so we can put more money back into people’s pockets across the country."
Opmerkingen