LONDON, Aug. 21 (Xinhua) -- Public borrowing in the United Kingdom (UK) surged to 3.1 billion British pounds (about 4.03 billion U.S. dollars) in July, marking the highest level for the month since 2021, the Office for National Statistics (ONS) said Wednesday.
The borrowing, the difference between spending and tax income, is 3 billion higher than the projection made by the government's spending watchdog, the Office for Budget Responsibility (OBR). In July 2023, the UK borrowed 1.3 billion to cover the gap between the state's revenue and its spending.
"July borrowing was almost 2 billion pounds higher this year than in 2023. Revenue was up on last year, with income tax receipts in particular growing strongly," said Jessica Barnaby, deputy director for Public Sector Finances of the ONS.
"However, this was more than offset by a rise in central government spending where, despite a reduction in debt interest, the cost of public services and benefits continued to increase," Barnaby noted.
Data showed that public sector net debt excluding public sector banks was estimated at 99.4 percent of GDP at the end of July. This was 3.8 percentage points more than at the end of July 2023 and remains at levels last seen in the early 1960s, said the ONS.
The think tank Resolution Foundation said further deterioration in the public finances underlines fiscal challenges for the Autumn Budget in October, the first budget from the new Labour government.
"The fiscal inheritance facing the Chancellor is one of rising taxes, increasing spending challenges, and very little wriggle room in the event of bad economic news. This combines to create a challenging backdrop for the new government to realize its ambitions of boosting growth while putting the public finances on a sustainable path," said Cara Pacitti, Senior Economist at the Resolution Foundation. ■
