UK government borrows £22bn in record for November amid energy crisis – business live

Rolling, live coverage as energy price support pushes 2022 deficit £50bn above pre-coronavirus levels

The UK goevrnment’s £22bn borrowing in November was signficantly higher than the £13bn expected by economists polled by Reuters.

There are several policy decisions that are all working together to push up borrowing, said Samuel Tombs, chief UK economist at Pantheon Macroeconomics, a consultancy.

Public borrowing was boosted in November by the government’s energy and cost of living interventions, the decision to reverse April’s national insurance hike, and high inflation.

The energy bills support scheme cost the government £1.9bn in November, while the energy price guarantee was the main driver of a £4.7bn year-over-year rise in subsidies. In addition, social assistance payments were £3.3bn higher than a year ago, reflecting the payment of the second cost of living grants to working-age benefit recipients.

Looking ahead, continued energy bills support and the ninth consecutive rise in interest rates announced by the Bank of England last week will continue to squeeze public finances. The Office for Budget Responsibility (OBR) has revised its borrowing forecasts up by £64.2bn in financial year 2022-23 and £39.8bn in 2023-24 from their view at Q1 2022.

In the medium-term though, with a recovering economy and rising taxes, the OBR expects net government debt as a proportion of GDP to continue to remain close to 100% of GDP until 2025-26 before starting to fall.

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