- UK borrowing for December rose to £17.8 billion – up by £10.1 billion compared with 2023
- Debt costs increased to £8.3 billion – the third highest interest repayment for December since records began
- Central government receipts rose by £2.3 billion compared with the previous year to £85 billion, offset by the reduction in National Insurance
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK public sector finances:
“If anyone needed a reminder of the huge challenge being faced by Rachel Reeves, this morning’s public sector borrowing figures spell it out in underlined, bold and capital letters.
“Despite a chunky rise in the tax take of £4 billion the cash coming in just isn’t covering what’s going out, especially when those increases are offset by a fall in National Insurance contributions.
“Add in a significant uptick in debt interest and you’ve got a recipe for continued jitters from financial markets, even if borrowing costs have dropped back from recent highs.
“Finding efficiencies and spending every penny productively is what the Treasury has promised will help, but as the government has spelt out time and again, it’s only growth that can offer an alternative to reigning in ambitions as the chancellor has ruled out pulling any of the other levers available to her.
“It’s important to recognise that these figures do include a one-off payment of £1.7 billion for the repurchase of over 36,000 military homes and that next month will be bolstered by that looming self-assessment deadline, though £2.5 billion of that was paid early and is included in the December data.
“Courting investment, giving the green light to projects like a third runway at Heathrow and pushing regulators to cut red tape are all in the mix but making sure any decisions are the right ones for the country and not just for right now mustn’t be tuned out in all the noise.”
