The º£½ÇÊÓƵ government borrowed £1.6bn more in October than a year earlier - the second-highest figure for the month in over three decades.
The Office for National Statistics (ONS) reported this morning that the government's borrowing - the difference between spending and income - reached £17.4bn last month.
The ONS also revealed that the government's current budget deficit, which is borrowing to fund day-to-day spending, was at £12.7bn last month. This is almost half-a-billion pounds up on the previous month, making it the second-highest October deficit since 1997.
This news follows the ONS's announcement yesterday that inflation had risen to 2.3 per cent, effectively extinguishing hopes of a Christmas interest rate cut.
The ONS further stated that the central government debt interest payable was £9.1bn, £0.5 billion more than in October 2023 and the highest figure for the month since records began, as reported by .
Jessica Barnaby, ONS Deputy Director for Public Sector Finances, said: "This month's borrowing was the second highest October figure since monthly records began in January 1993."
Despite a cut in the main rates of National Insurance earlier in 2024, total receipts rose on last year. However, with increased spending on public services, benefits and debt interest costs, expenditure rose faster than revenue overall.
In its report, the ONS also noted that borrowing in the financial year to October was £96.6bn, an increase of £1.1bn and the third highest financial year-to-October ever.
Following the announcement of the government's Autumn Budget, which instituted a significant £40bn tax hikeimpacting inheritance tax and raising the minimum wageinitiatives were set to bolster public service spending and address what is termed as a £22bn deficit in the public finances.
Chief Secretary to the Treasury Darren Jones said: "We inherited a £22 billion 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."
However, Danni Hewson, AJ Bell head of financial analysis, said: "Whilst this set of figures predates the chancellor's tax raising Budget, the numbers raise big questions about whether the measures announced at the end of October will be enough to balance the books."
Ms Hewson noted: "Borrowing shot up in the month of October to levels only eclipsed by the amount needed at the height of the pandemic when millions of people's wages were being subsidised by the government."
She added: "The decision to increase public sector pay has played a massive part, with the cost of government spend on goods and services up a significant £2.5 billion in October."
"Whilst the tax take was also up considerably, boosting total receipts by £3.8 billion, that was offset by the cut to NI contributions implemented by the previous government.
"An increase in debt interest payments didn't help but the end of cost of living payments did mean that despite the uprating of benefits, the additional spend was only £0.5 billion compared to the same time last year.
"Rachel Reeves has promised that she won't borrow to fund day-to-day spending which is why the Budget contained those huge and unpopular tax increases. But if jobs are cut, if wages don't go up as they might otherwise have done, and if inflation does remain steadfastly sticky, then those sums get rather more difficult and the spectre of further tax increases looms that bit larger."
Like this story? Why not sign up here for free to get the latest business news straight to your inbox.
