UK Budget Deficit Widens On Energy Subsidies

ukpublicfinance sept21 21mar23 lt

The UK budget deficit increased more than expected to its highest February level due to huge spending on energy support schemes, the Office for National Statistics reported Tuesday.

Public sector net borrowing excluding banks increased by GBP 9.7 billion from the last year to GBP 16.7 billion in February.

This was the highest February borrowing since records began in 1993 and also exceeded economists' forecast of GBP 11.4 billion.

Data showed that the interest payable on central government debt decreased by GBP 1.3 billion to GBP 6.9 billion in February.

Of the GBP 6.9 billion interest payable in February, about GBP 3.4 billion reflected the impact of inflation on the index-linked gilt stock, the ONS said.

In the financial year-to-February, the public sector borrowed GBP 132.2 billion, which was GBP 15.5 billion more than in the same period last year.

The latest forecast from the Office for Budget Responsibility suggested that the public sector could borrow an additional GBP 20.2 billion in March 2023.

In the financial year to February, central government receipts grew 11.0 percent from a year ago and expenditure increased 8.6 percent.

At the end of February, public sector net debt was GBP 2,507.3 billion or around 99.2 percent of gross domestic product.

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