The UK government borrowed billions of pounds more than expected last month, adding to the pressures on chancellor Rachel Reeves.
Government borrowing jumped to £17.4bn in October to cover the difference between public sector spending and income, according to the first assessment of the public finances since last month’s budget.
That’s £1.6bn more than in October 2023 and the second highest October borrowing since monthly records began in January 1993.
City economists had expected a rather smaller borrowing figure, of around £12.3bn for October, after the UK borrowed over £16bn in September.
ONS deputy director for public sector finances Jessica Barnaby says that government spending – on services, and also on debt repayments – rose faster than tax receipts: “This month’s borrowing was the second highest October figure since monthly records began in January 1993. 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 increase in borrowing lifts the UK’s public sector net debt to 97.5% of GDP, levels last seeen in the early 1960s.
But, if you use the new measure of public sector net financial liabilities (persnuffle), used by Reeves in her new fiscal rules, the national debt is smaller, at 83.7% of GDP.
The tax rises in Labour’s budget last month should help push down borrowing, expect they are being resisted by UK retailers, and farmers.
Chief secretary to the Treasury Darren Jones says the government is committed to stabilising the public finances:“We inherited a £22bn black hole in our public finances from the previous government. At the budget we addressed this, fixing the foundations and putting public finances on a sustainable footing to rebuild the country.
“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.”
Bitcoin is heading close to the $100,000 mark for the first time, after hitting the latest in a series of record highs.
The world’s largest cryptocurrency has jumped to around $97,902 in early trading, meaning it has surged by 132% so far this year.
Bitcoin has rallied from below $70,000 since Donald Trump won the US presidential election two weeks ago, with traders calculating that the next administration will be more friendly towards crypto.
Trump recently pledged to make the US the crypto capital of the world, and Bloomberg reported last night that the president-elect’s team is holding discussions with the digital asset industry about whether to create a new White House post solely dedicated to cryptocurrency policy.
Stephen Innes, managing partner at SPI Asset Management, says: "Meanwhile, bitcoin is inching closer to a monumental $100,000 milestone, driven by mounting confidence that president-elect Donald Trump’s administration will usher in a crypto-friendly era. Speculators rally behind the narrative, fueling a frenzy as the digital asset edges toward an unprecedented valuation."
The agenda
• 7am GMT: UK public finances for October
• 11am GMT: CBI industrial trends report for October
• 1.30pm GMT: US weekly jobless claims
• 1.30pm GMT: Philadelphia Fed manufacturing index
• 3pm GMT: eurozone consumer confidence report
We’ll be tracking all the main events throughout the day ...
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