First September rise in public borrowing for five years ahead of Budget
Written by News on 22/10/2019
Government borrowing in September has risen for the first time in five years, according to the final official figures ahead of Chancellor Sajid Javid’s first scheduled Budget.
The Office for National Statistics (ONS) said public sector net borrowing, excluding state-owned banks, rose by £600m to £9.4bn compared to the same month a year ago.
It meant that borrowing hit £40.3bn in the financial year to date, leaving it £7.2bn higher than in the first six months of 2018/19.
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The ONS said seasonal payments of £2bn for winter fuel and £2.7bn for student loan write-offs, that are always included in September’s figures, contributed to the higher borrowing.
The chancellor has indicated that the government is “turning the page on austerity” – with a spending splurge signalled for the Budget as the Conservatives eye post-Brexit support for the economy and a general election ahead.
The speech is currently slated for 6 November but it could yet, in theory, be put back depending on Brexit developments amid the current political crisis in Westminster.
Mr Javid has placed an emphasis on infrastructure investment.
This will come at a cost.
In March, the Office for Budget Responsibility (OBR) forecast public borrowing would rise from a 16-year low to £29.3bn in 2019/20.
It will give an update on that projection on Budget day.
Pantheon Macroeconomics responded to the latest figures by projecting government borrowing of around £50.3bn this year, saying it reflected a shift in the government’s priorities.
Its chief UK economist, Samuel Tombs, wrote: “No political appetite exists for further austerity measures to reduce the deficit.
“Indeed, the chancellor allocated in last month’s Spending Round an extra £12bn to departments to spend in 2020/21, over and above that already planned for in the Spring Statement, while both parties will pledge giveaways to the electorate in the election likely to be held in the coming months.
“If the next Budget is held as currently planned on November 6, voters can expect pre-election sweeteners from the Conservatives.”
(c) Sky News 2019: First September rise in public borrowing for five years ahead of Budget
