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Budget deficits

UK Government Borrowing Hits Record High, Debt Rises to 96.4% of GDP

Strategic Insights

— 1 min read

The UK government's borrowing has hit a record high, with £18.1 billion borrowed in August, £3.5 billion more than the same month last year. This brings the total borrowing for the first five months of the financial year to £83.8 billion, the second-highest April-to-August total on record. The debt-to-GDP ratio has now risen to 96.4%, a level not seen since the 1960s. The current budget deficit for the year so far stands at £62 billion, sparking concerns about the government's ability to plug the financial gap.

Key Takeaways:

  • The UK government's borrowing has reached a record high of £18.1 billion in August, exceeding the same month last year by £3.5 billion.
  • The total borrowing for the first five months of the financial year has risen to £83.8 billion, the second-highest April-to-August total on record.
  • The debt-to-GDP ratio has increased to 96.4%, a level not seen since the 1960s.
  • The current budget deficit for the year so far stands at £62 billion, posing concerns for Chancellor Rachel Reeves' ability to address the financial gap.
  • Russ Mould, investment director at AJ Bell, warns that the uncertainty surrounding public finances could lead to a decline in business investment and consumer confidence.

Statistics:

  • £18.1 billion: The record high borrowing figure for August 2023.
  • £3.5 billion: The increase in borrowing compared to August 2022.
  • £83.8 billion: The total borrowing for the first five months of the financial year (April to August).
  • 96.4%: The current debt-to-GDP ratio, a level not seen since the 1960s.
  • £62 billion: The current budget deficit for the year so far.

Sources:

  • Office for National Statistics
  • Russ Mould, investment director at AJ Bell

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