UK borrowed more than expected in November amid pre-budget pressure
The UK government borrowed more than expected in November, official figures show, amid pressure on the economy before Rachel Reeves announced her autumn budget.Figures from the Office for National Statistics (ONS) showed public sector net borrowing – the difference between spending and income – was £11.7bn last month, £1.9bn less than in the same month a year earlier.In the first snapshot since the chancellor’s tax and spending statement on 26 November, the reading was above City predictions of a £10bn deficit.
Tom Davies, an ONS senior statistician, said: “Despite an increase in spending, this month’s borrowing was the lowest November for four years.The main reason for the drop from last year was increased receipts from taxes and national insurance contributions.“However, across the financial year to date as a whole, borrowing is higher than last year.”Borrowing in the financial year to November was £132.3bn.
This was £10bn more than in the same eight-month period of 2024, and the second-highest figure for the period on record after 2020, during the height of the Covid pandemic.Matt Swannell, the chief economic adviser to the EY Item Club, said the overshoot in November could put Reeves in danger of missing the Office for Budget Responsibility’s forecasts for borrowing next year.“Over the next few months, the government will need to reduce the current budget deficit much more substantially than it did last year,” he said.The figures come a day after the Bank of England cut interest rates for a sixth time since August last year, easing some of the pressure on borrowers, in a pre-Christmas boost for the UK’s struggling economy.Activity had slid into reverse in the run-up to Reeves’s budget on 26 November, as speculation over tax changes weighed on household spending and business investment.
Official figures show gross domestic product shrank unexpectedly in October, while the Bank forecasts that growth is on track to flatline in the fourth quarter,Mel Stride, the shadow chancellor, said: “At £132bn, borrowing this year is the highest on record, outside of the pandemic – yet at the budget Labour chose even more reckless spending, piling up ever higher debt,”After a year of speculation over whether the chancellor would breach her self-imposed fiscal rules, Reeves used the budget to increase her headroom against her main stability rule to £22bn – giving her more wriggle room against a fresh deterioration in the public finances,James Murray, the chief secretary to the Treasury, said the government was targeting budget savings,He said: “£1 in every £10 we spend goes on debt interest – money that could otherwise be invested in public services.
That is why last month the chancellor set out a budget that delivers on our pledge to cut debt and borrowing.”According to the latest snapshot, revenue from compulsory social contributions increased by £3bn from a year earlier to £17.2bn, after changes to the rate of national insurance contributions paid by employers came into effect in April.For the year to November, compulsory social contributions reached £131.2bn, an increase of £21bn compared with the same period in 2024.
November is typically a costly month for government spending, reflecting the timing of winter fuel payments.Overall net social benefit payments rose by £1.5bn from a year earlier to £26.8bn, largely because of inflation-linked increases and the state pension triple lock.Public sector net investment also rose by £1.
9bn compared with a year earlier, mainly reflecting a £1,6bn payment towards the construction of the Hinkley Point C nuclear plant under a 2013 agreement with EDF,Elliott Jordan-Doak, a senior UK economist at the consultancy Capital Economics, said the higher-than-expected November borrowing figure showed it was “only a matter of time before fiscal worries begin to dominate the news flow again” after Reeves’s budget,“The public finances remain weak,Reeves has staked much fiscal credibility on chunky tax increases in the back end of the forecast period.
But we think today’s figures further illustrate the shaky foundations of that gamble.”
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UK borrowed more than expected in November amid pre-budget pressure
The UK government borrowed more than expected in November, official figures show, amid pressure on the economy before Rachel Reeves announced her autumn budget.Figures from the Office for National Statistics (ONS) showed public sector net borrowing – the difference between spending and income – was £11.7bn last month, £1.9bn less than in the same month a year earlier.In the first snapshot since the chancellor’s tax and spending statement on 26 November, the reading was above City predictions of a £10bn deficit
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