海角视频 government borrowing has surged to £20.2bn in September, official figures have shown, delivering another blow to Rachel Reeves as she prepares for a challenging tax-raising Budget next month.
The Office for National Statistics (ONS) revealed that government borrowing during the month was the highest recorded in September for five years and represented a £1.6bn increase compared to the previous month, as reported by .
Economists had predicted the government would borrow £20.5bn over the month.
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During the first six months of the current financial year, government borrowing reached £99.8bn, the second-highest figure ever recorded.
The current budget deficit stood at £71.8bn.
The ONS also reported that debt interest payments over the past month totalled £9.7bn, whilst debt as a proportion of GDP reached 95.3 per cent, a percentage point higher than levels recorded a year ago.
The latest figures compound concerns over public finances as Labour ministers grapple with efforts to limit government borrowing needed to fund expenditure on services including the NHS and security.
It represents one of the final ONS publications the Chancellor will review before the Budget on 26 November.
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Richard Carter, head of fixed interest research at Quilter Cheviot, said: "Without a shift in the fiscal rules once again, the 海角视频 economy is in somewhat of a straitjacket.
"Fiscal headroom is all but non-existent, and the growth that is required to create it is being hampered by a high tax burden and uncertainty of more revenue raising measures from the government to come.
"The economic winds are refusing to blow in the 海角视频's direction, but the recent fall in gilt yields have bought some breathing room. What the government does with that will be watched very closely at the despatch box next month."
Chief Secretary to the Treasury James Murray said: "This government will never play fast and loose with the public finances. We know that when you lose control of the public purse it's working people who pay the price.
"That's why we plan to bring down borrowing, and according to IMF data, are set to deliver the largest primary deficit reduction in both the G7 and G20 over the next five years."
Shadow Chancellor accused Reeves of making "the next generation...saddled with Labour's debts."
"If Rachel Reeves had a plan – or a backbone – she would stand up to her backbenchers, get spending under control and cut the deficit. Instead she is plotting to hike taxes yet again to pay for her failures," Stride said.
Government borrowing data sets up for difficult Budget
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Reeves is widely anticipated to confront a fiscal shortfall estimated at approximately £30bn if she intends to adhere to her fiscal rule stipulating that day-to-day expenditure should align with receipts by 2030.
City economists suggest her headroom of approximately £9.9bn remaining at the Spring Statement has been eroded by elevated borrowing costs beyond forecasts and policy reversals on welfare savings midway through the year. An anticipated productivity downgrade by the fiscal watchdog is also predicted to exacerbate the deficit.
In the lead-up to the Budget, the Treasury is hastily announcing policies aimed at stimulating growth to mitigate the impact of expected Office for Budget Responsibility (OBR) forecast downgrades.
Announced policies include comprehensive planning reforms and a move revealed today to expedite the process of reducing red tape for businesses.
Industry experts have highlighted that the Employment Rights Bill, whose impact on the 海角视频 economy has yet to be measured by the OBR, could increase the regulatory burden on 海角视频 firms.
Reeves has instructed Cabinet ministers to concentrate on curbing inflation, which is projected to reach four per cent in the year to September.
This could form part of a longer-term strategy to alleviate pressure on public finances and minimise the harmful effects of increased government borrowing.
Policies designed to control inflation at the Budget could encourage the Bank of England to reduce interest rates more rapidly, thus decreasing the government's borrowing costs.
The OBR stated in March that it anticipated borrowing costs for government lenders to surpass £110bn this year, with any efforts to keep bond markets at bay likely preventing further tax increases or spending cuts in future Budgets.