Public borrowing soared in December in the United Kingdom because of government aid for energy and interest paid on the debt, notes Tuesday the Office for National Statistics (ONS) in its monthly report.
“
Public sector borrowing in December reached £27.4 billion, the highest level for December since monthly statistics began in 1993, largely due to a sharp increase in aid to energy and debt interest
,” writes the ONS.
It is also £16.7 billion more than in December 2021 and £9.8 billion more than the latest forecast from the OBR, the public body responsible for budget forecasts.
The British government has introduced a cap on energy bills which have roughly doubled over a year in the wake of oil and gas prices, which have soared with the post-covid reopening of the economy and the war in Ukraine, before retreating.
Interest on government debt reached £17.3 billion in December, the highest level since these statistics began, while the retail price index (RPI), one of the indicators of inflation in the UK, has spiked in recent months and pushed up borrowing rates on sovereign debt.
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At the end of December, public sector debt reached 2,503.6 billion pounds, around 99.5% of gross domestic product (GDP), a level not seen since the early 1960s, the ONS said.
"
The public finance figures for December show even more that the government's budgetary position is deteriorating rapidly
," commented the research house Capital Economics.
