October UK Public Sector Borrowing Hits Five-Year Monthly High

(Alliance News) - UK public borrowing increased in October, the UK Office for National Statistics ...

Alliance News 21 November, 2019 | 10:08AM
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(Alliance News) - UK public borrowing increased in October, the UK Office for National Statistics said Thursday.

Public sector borrowing in October rose to GBP11.2 billion, GBP2.3 billion higher than a year before and the highest October figure recorded since 2014.

Of the GBP11.2 billion, central government borrowed GBP7.6 billion, local government borrowed GBP1.0 billion and the Bank of England's contribution to net borrowing was GBP2.5 billion.

In October, there was a cash transfer of GBP3.4 billion recorded from the Bank of England Asset Purchase Facility Fund to central government. This transfer is public sector borrowing neutral, the ONS clarified, but it had the effect of reducing central government net borrowing by GBP3.4 billion. It also increased the Bank of England's net borrowing by an equal amount.

Had this transfer not taken place, central government's net borrowing in October would have been GBP11.0 billion and the Bank of England would have shown a surplus of GBP900 million.

Central government collected GBP61.7 billion in October, up GBP200 million on the year before, but government spending increased by GBP1.7 billion to GBP66.8 billion. ONS said GBP64.5 billion of this was attributed to "day-to-day" activities while GBP2.3 billion was spent on investment.

In the current financial year to date - April to October - borrowing topped GBP46.3 billion, GBP4.3 billion more than in the same period the year before. The ONS said this is the highest October year to date borrowing since 2017 but noted 2018's borrowing was the lowest since 2007.

The UK's debt, which is public sector debt excluding public banks, ended October at GBP1.80 trillion, representing 80.4% of GDP, up GBP321 billion on the year before.

Excluding the Bank of England, debt ended October at GBP1.62 trillion, or 72.2% of GDP, up GBP42.8 billion from last year.

Central government net cash requirement was GBP33.0 billion in the current financial year-to-date; GBP17.3 billion more than in the same period in the previous year.

Central government net cash requirement excluding both UK Asset Resolution Ltd and Network Rail was GBP32.8 billion in the current financial year-to-date, GBP15.5 billion more than in the same period last year.

The ONS said the difference between central government's income and spending makes the largest contribution to the amount borrowed by the public sector.

Year to date receipts grew by 2.4% to GBP428.2 billion, which includes GBP312.6 billion in tax revenue, but central government spending increased by 3.4% to GBP455.8 billion. About two-thirds of this, ONS said, was spent by the Departments of Education, Defence and Health & Social Care, with just under a third spent on social benefits. The remainder was used to pay interest on government debt.

By Paul McGowan; paulmcgowan@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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