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State finance

UK Public Borrowing Surges to 3.1 Billion Pounds in July, Highest since 2021

Strategic Insights

— 2 min read

The UK's public borrowing surged to 3.1 billion British pounds in July, marking the highest level for the month since 2021, according to the Office for National Statistics (ONS). This increase, which is 3 billion pounds higher than the projection made by the Office for Budget Responsibility (OBR), is largely due to a rise in central government spending. The public sector net debt excluding public sector banks was estimated at 99.4 percent of GDP at the end of July, a significant increase from the 96.6 percent recorded at the end of July 2023. The fiscal challenges for the new Labour government are now more pronounced, with rising taxes, increasing spending challenges, and limited room for maneuver in the event of bad economic news.

Key Takeaways:

  • Public borrowing in the UK surged to 3.1 billion British pounds in July, the highest level for the month since 2021, according to the ONS.
  • The borrowing increase, 3 billion pounds higher than the projection made by the OBR, is mainly due to a rise in central government spending.
  • Public sector net debt excluding public sector banks was estimated at 99.4 percent of GDP at the end of July, up from 96.6 percent at the end of July 2023.
  • Revenue was up on last year, with income tax receipts growing strongly, but this was offset by a rise in central government spending.
  • The OBR's fiscal watchdog warns that the fiscal inheritance facing the new Labour government is one of rising taxes, increasing spending challenges, and limited room for maneuver.
  • The Resolution Foundation think tank notes that the public finances are facing significant challenges, with little wriggle room in the event of bad economic news.

Statistics:

  • UK public borrowing: 3.1 billion British pounds (July 2024) [1]
  • UK public borrowing (July 2023): 1.3 billion British pounds [1]
  • Increase in public borrowing: 3 billion British pounds (July 2024 vs July 2023) [1]
  • Public sector net debt: 99.4 percent of GDP (end of July 2024) [1]
  • Public sector net debt (end of July 2023): 96.6 percent of GDP [1]
  • Percentage point increase in public sector net debt: 3.8 (end of July 2024 vs end of July 2023) [1]

Sources:

  • Office for National Statistics (ONS), "Public sector finance, UK: July 2024" (2024)
  • Resolution Foundation, quoted in Xinhua, "UK public borrowing surges to 3.1 billion pounds in July, highest since 2021" (2024)
  • Office for Budget Responsibility (OBR), quoted in Xinhua, "UK public borrowing surges to 3.1 billion pounds in July, highest since 2021" (2024)

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