A milestone crossed as borrowing runs hot
Britain's national debt has passed £3 trillion, equivalent to roughly $4 trillion, for the first time on record. The threshold was crossed because government borrowing in the opening half of the fiscal year came in above official forecasts, according to figures that the Chancellor of the Exchequer now has to work with.[S1][S2][S3]
The Office for National Statistics put borrowing between April and September at £97.8 billion. That is £6 billion more than the Office for Budget Responsibility had projected in March, meaning the fiscal position has deteriorated relative to the assumptions underpinning the government's plans.[S1]
September on its own accounted for £24.5 billion of borrowing. That monthly total exceeded both the OBR's expectation and the amount borrowed in the same month a year earlier, so the overshoot is not confined to a single quarter or a one-off timing effect.[S1]
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Pressure builds before the Budget
The figures land shortly before a Budget that has been widely trailed as tax-raising, and they frame the choices facing the Chancellor. A deficit running above forecast reduces the margin for error, whether the priority is protecting departmental spending, steadying the public finances, or absorbing higher debt-servicing costs.[S1][S4]
Separate reporting points to inflation at 3.5%, adding to the squeeze on households and raising the prospect of further interest-rate pressure. Higher inflation can also raise the cost of servicing index-linked debt, compounding the effect of a larger stock of borrowing.[S4]
