ALBAWABA – The United Kingdom’s (UK) budget deficit has increased by 27 percent from a year earlier in the period April through November, official data showed, with public UK debt estimated at 97.8 percent of the country’s gross domestic product (GDP) as of September 2023.
Data released by the Office of National Statistics (ONS) shows public sector net debt stood at $3.289 trillion (£2,599.0 billion), up 2.1 percent from September 2022.
Public UK debt has hit levels last seen in the early 1960s, according to the ONS website.
The deficit between April and November climbed to $147 billion (£116.4 billion), up 27 percent from a year earlier, Bloomberg reported the ONS as saying on Thursday.
November alone saw a shortfall of £14.3 billion, more than the £13 billion forecast by Bloomberg’s economists.
The New York-based news agency explains the increase to date as reflective of the spending to compensate Britons for the highest inflation in decades. Welfare costs rose 12% from a year earlier after benefits were raised by 10% in April, while public-sector staff costs also rose by 12%, the ONS said.
Rishi Sunak's government has seen public UK debt rise in 2024 as government borrowing increases - Shutterstock
These increases were partly offset by a 15% reduction in debt-interest payments, given a drop in the rate of inflation used to determine payments on index-linked bonds.
Last month, however, debt costs hit $9.75 billion (£7.7 billion), the highest November total since records began in 1997.
Still, despite the upward pressure on spending, the Office for Budget Responsibility expects borrowing for 2023-24 as a whole to come in at £124 billion, slightly below the £130.5 billion recorded a year ago.
According to Reuters, Thursday's data also showed how inflation and rising wages boosted receipts from income tax, corporation tax and value-added tax by 8-10% in the April-November period.
Nonetheless, the government will find more room to manoeuvre with inflation falling faster than forecast and interest rate expectations also dropping, which could save the Treasury billions in debt costs.
