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The UK government borrowed more than expected in December, highlighting the challenge facing Chancellor Rachel Reeves as she tries to restore confidence in her fiscal plans and stimulate growth.
Borrowing – the difference between public sector spending and income – reached £17.8 billion last month, £10.1 billion more than in December 2023 and the highest December borrowing for four years, data from the Office for National Statistics showed on Wednesday.
It was also higher than the £14.1 billion expected by economists polled by Reuters, and compared with the £14.6 billion forecast by the Office for Budget Responsibility, the UK's financial watchdog.
In the first nine months of the financial year, borrowing was £129.9 billion, £8.9 billion more than in the same period in 2023, and the second highest fiscal borrowing from the financial year to December since monthly records began in January. January 1993 and higher than the rate recorded in the first nine months of the fiscal year. £125.9 billion OBR forecast.
Reeves sought to reassure investors after the UK's borrowing costs rose this month to the highest level since the global financial crisis, threatening its ability to meet a self-imposed fiscal rule in which daily spending is covered by tax revenues.
UK borrowing costs have fallen since last week's figures showed inflation unexpectedly slowed in December and the global bond sell-off has eased.
But the government remains under pressure to turn around an economy that grew by just 0.1 percent in November after a slight contraction in September and October.
This is a developing story
