2021.11.1910:17:00UTC+00UK Budget Logs Second Biggest October Deficit On Record

UK budget registered its second-biggest October borrowing since monthly records began in 1993 and also stayed above expectations, figures from the Office for National Statistics revealed on Friday.

Excluding banks, public sector net borrowing came in at GBP 18.8 billion in October, which was GBP 0.2 billion less than in October 2020. Nonetheless, this was the second highest borrowing for the month of October. The expected level was GBP 13.8 billion. Driven by higher inflation, interest payments increased to GBP 5.6 billion from GBP 1.8 billion last year.

At the same time, government receipts grew GBP 3.8 billion to GBP 65.5 billion October.

The winding down of the furlough scheme helped to bring down public sector net borrowing in October, Bethany Beckett, an economist at Capital Economics, said. "But we doubt that the public finances will get much help from faster GDP growth in the near term."

Data showed that public sector net debt excluding public sector banks was GBP 2,277.6 billion at the end of October, or around 95.1 percent of gross domestic product, maintaining a level not seen since the early 1960s.

In the financial year-to-October 2021, PSNB excluding banks was estimated at GBP 127.3 billion, this was the second-highest financial year-to-October borrowing since monthly records began in 1993, data showed.

The Office for Budget Responsibility had estimated a budget deficit of GBP 183 billion for 2021-22.