UK government borrowing at record December high due to energy support and debt interest – business live
Government borrowing surges to £27.4bn as debt interest jumps to £17.3bn, also the highest December figure on record; Ford to cut 3,200 jobs in Europe
Samuel Tombs, chief UK economist Pantheon Macroeconomics, has crunched the numbers.
Turning to the details of December’s data, interest payments leapt to £17.3bn, from £8.7bn a year ago, due to the big month-to-month jump in the RPI [retail prices index] two months earlier, which primarily reflected October’s increase in consumer energy prices. Note that changes in the RPI determine the accrued level of payouts on index-linked gilts.
In addition, the Energy Bills Support Scheme and the Energy Price Guarantee collectively drove a £4.8bn year-over-year rise in subsidies.
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