Public debt is falling, but at slower rates, new data shows

Public debt continued to decline as the Treasury Department recorded rising tax revenues and lower spending, although the decline slowed compared to previous months, according to official figures.

The Office for National Statistics (ONS) announced that net public sector borrowing was £ 18.8 billion in October, a decrease of £ 200 million from the same month last year.

However, this remains the second highest October for borrowing since records began in 1993. The highest was a year ago.

The data shows that borrowing has increased $ 127.3 billion so far this fiscal year.

Public sector net debt at the end of October is £ 2.28 trillion – or around 95.1% of gross domestic product (GDP) – and holds levels not seen since the early 1960s.

Central government revenues were £ 65.5 billion, up £ 3.8 billion from October 2020, while central government agencies spent £ 78.8 billion – £ 1.5 billion more than in October a year.

Interest payments on debt remain high, however, with £ 5.6 billion disbursed in October, up from £ 1.8 billion last year.

Chancellor Rishi Sunak said: “The unprecedented support the government provided during the pandemic has protected millions of jobs and businesses, but has also left us with much higher national debt.

“It is right that we are now strengthening our public finances for future generations – that is why I set new fiscal rules in the budget last month that will keep the debt on a sustainable path in the years to come.”

But Samuel Tombs, UK chief economist at Pantheon Macroeconomics, pointed out: “Public borrowing is falling much less rapidly than it was earlier this year, reflecting the slowdown in economic recovery and the rise in inflation that is affecting interest payments on index-linked gilts.

“Borrowing in October was only £ 0.2 billion lower than a year ago, compared to a decrease of £ 8.2 billion in September and an average decrease of £ 17.2 billion in the first half of this fiscal year.