UK borrowing falls in November as pandemic spending eases
UK public borrowing fell in November as spending on the pandemic eased and the furlough scheme came to an end, but was still the second-highest figure for the month since records began in 1993.
According to data released on Tuesday by the Office for National Statistics, public sector net borrowing fell by £4.9bn from November last year to £17.4bn. However, this was higher than the £16bn expected by analysts and above the Office for Budget Responsibility’s forecast of £14.2bn.
The decline on the year was largely down to the fact that most of the country was in lockdown last year.
Meanwhile, the debt pile reached £2.32trn, which is equivalent to 96.1% of GDP and the worst ratio since March 1963.
Capital Economics UK economist Bethany Beckett said: "The sharp rise in RPI inflation in recent months prompted debt interest costs to pick up to £4.5bn in November (OBR: £2.8bn), up from £4.1bn last November. At the same time, central government departments spent £32.1bn on goods and services in November, which was £2.1bn higher than at the same time last year.
"Part of that rise is due to spending on the NHS Test and Trace programme and the vaccine booster programme. Together, that pushed up government spending to £70.3bn, which was higher than the OBR’s forecast of £66.9bn. And that was only partially offset by a small rise in tax revenues, which came in at £61.0bn in November (OBR: £59.9bn) and was ahead of last November’s total of £58.6bn."
Beckett noted that these data predated the recent surge in coronavirus infections caused by the Omicron variant, with a near-term tightening of virus restrictions once again a possibility.
"Although the economy has got better at coping with restrictions with each new wave, we still suspect it would prompt a deterioration in the public finances via lower tax revenues and the potential reintroduction of government support schemes," she said.