Britain's borrowing surge may mean another tax rise

The latest public sector borrowing figures are enough to have anyone inside 11 Downing Street heading for the drinks cabinet.

- JAMES MOORE

The total came to £17.4bn in October; that’s £1.6bn more than this time last year, £5bn higher than City forecasts, and the second highest October number since monthly records began in January 1993.

A word of caution: these monthly numbers are very volatile. But there is no disguising the fact that this was a bad one. And we’ve had a run of bad ones recently. It is worryingly close to the £18.2bn recorded in October 2020, during the height of the pandemic when millions of people were having their wages paid by the government and large chunks of the economy were closed.

The government also spent £9.1bn on interest alone – £0.5bn more than this time last year and the highest October figure since monthly records began in January 1997. At 97.5 per cent of GDP, public sector net debt is running at levels not seen since the early 1960s. Small wonder that chancellor Rachel Reeves changed the calculation for the purposes of her fiscal rules, settling instead on public sector net financial liabilities. They sit at 83.7 per cent of GDP – hardly something to celebrate.