Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The UK government borrowed more than expected in December, underlining the challenge facing chancellor Rachel Reeves as she tries to restore confidence in her fiscal plans and kick-start growth.
Borrowing — the difference between public sector spending and income — was £17.8bn last month, £10.1bn more than in December 2023 and the highest December borrowing for four years, data from the Office for National Statistics showed on Wednesday.Â
It was also above the £14.1bn expected by economists polled by Reuters, and compared with the £14.6bn forecast by the Office for Budget Responsibility, the UK fiscal watchdog.
In the first nine months of the fiscal year, borrowing was £129.9bn, £8.9bn more than in the same period in 2023, the second-highest financial year-to-December borrowing since monthly records began in January 1993 and higher than the £125.9bn forecast by the OBR.
Reeves has sought to reassure investors after the UK’s borrowing costs this month climbed to the highest level since the global financial crisis, threatening her ability to meet a self-imposed fiscal rule in which day-to-day spending is covered by tax receipts.
UK borrowing costs have eased since figures last week showed inflation unexpectedly slowed in December, and a global bond sell-off abated.
But the government remains under pressure to turn around the economy, which grew just 0.1 per cent in November after mild contractions in September and October.
This is a developing story