Government borrowing higher than expected in October

Government borrowing was much higher than expected in October, official figures show.

Borrowing – the difference between spending and tax take – was £17.4bn last month, the second highest October figure since monthly records began in 1993.

The borrowing figures are the first to be released since Chancellor Rachel Reeves’ first Budget last month.

The Budget is set to increase government spending by almost £70bn a year over the next five years, with half funded through higher taxes and the rest coming through higher borrowing.

Jessica Barnaby, deputy director for public sector finances at the Office for National Statistics (ONS), which produced the figures, said: “Despite the cut in the main rates of National Insurance earlier in 2024, total receipts rose on last year.

“However, with spending on public services, benefits and debt interest costs all up on last year, expenditure rose faster than revenue overall.”

The ONS figures showed that interest payments on government debt hit £9.1bn last month, the highest October figure since monthly records began in 1997.

Borrowing in the financial year to October has now reached £96.6bn, which is £1.1bn more than at the same point last year.

Chief Secretary to the Treasury Darren Jones said again that the Labour government had inherited a difficult economic situation following the General Election.

“At the Budget we addressed this, fixing the foundations and putting public finances on a sustainable footing to rebuild the country,” he said.

“This government will never play fast and loose with the public finances. Our new robust fiscal rules will deliver stability by getting debt down while prioritising investment to deliver growth.”