UK government borrowing hits record in February amid energy bills support
UK government borrowing rose last month to the highest February deficit on record, largely because of spending on support schemes to help households and businesses with spiralling energy bills.
The government borrowed £16.7bn in February, £9.7bn more than a year earlier and the highest February borrowing since monthly records began 30 years ago, according to the latest figures from the Office for National Statistics.
The government borrowed more despite higher tax receipts and lower debt interest payments. Cumulative borrowing for the full year to the end of March is on track to undershoot official forecasts. Economists said this could raise the chancellor’s hopes of being able to announce a pre-election giveaway later this year – but also warned that the turmoil in the banking sector could deepen the economic downturn.
The government raised £1bn from the new windfall tax on energy companies, the figures showed.
Ruth Gregory, the deputy chief UK economist at Capital Economics, said: “The big risk is that a further escalation in the banking crisis causes a deterioration in the fiscal outlook as the hit to the public finances from weaker economic growth is only partially cushioned by lower gilt [UK government bond] yields.”
Responding to the ONS figures, Jeremy Hunt said: “Borrowing is still high because we’re determined to support households and businesses with rising prices and are spending about £1,500 per household to pay just under half of people’s energy bills this winter.
“What will bring these costs right down is lower inflation, which is why it remains one of our top priorities to halve it this year, alongside growing our economy and reducing debt.”
In the spring budget last week, Hunt announced that the government’s
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