Government borrowing falls significantly below expectations in December at £7.8bn

investmentweek.co.uk:

The figure halved from December 2022 and was significantly lower than the £14bn forecast by the Office for Budget Responsibility, marking the lowest December borrowing since 2019.

The figure halved from December 2022 and was significantly lower than the £14bn forecast by the Office for Budget Responsibility, marking the lowest December borrowing since 2019.

UK inflation unexpectedly rises to 4% in December

Central government debt interest payable was £4bn last month, down £14.1bn from a year prior, and the lowest figure since December 2020, the ONS noted.

The agency explained the drastic drop was largely affected by Retail Prices Index movements on index-linked gilts.

However, borrowing for the financial year to December 2023 was £119.1bn, up £11.1bn on the nine-month period in 2022 and the fourth highest financial year to December on record, the ONS found. Despite this, the figure was still £5bn lower than the £124.1bn forecast by the OBR.

Public sector net debt stood at £2.7trn at the end of December, provisionally estimated at around 97.7% of UK GDP — 1.9 percentage points higher than in the same period in 2022, and the highest level since the 1960s.

Excluding the Bank of England, debt stood at £2.4trn — around 88.7% of GDP — £247.7bn lower than the wider measure, the ONS explained.

Public sector net worth was in deficit by £715.4bn for the month of December, compared with £593.7bn at the end of December 2022, yet government net cash came in £4.5bn lower than a year prior at £18.7bn for the month.

The ONS also revised the borrowing figures downwards for the financial year to March 2023 by £9.1bn. This means that in the last financial year the UK Government borrowed £130.1bn, £5.6bn higher than the previous financial