Official figures show the UK government borrowed nearly £10bn more than forecast in the year to October, adding pressure on Rachel Reeves ahead of her autumn budget. The Office for National Statistics reported borrowing of £17.4bn in October, the third-highest for that month on record.
Borrowing for the fiscal year so far stands at £116.8bn, £9.9bn higher than the Office for Budget Responsibility expected. Economists warn that the chancellor’s headroom against her fiscal rules has ‘almost certainly vanished’ due to policy U-turns, market movements, and a deteriorating productivity outlook.
The Treasury has already dropped plans to raise income tax, but significant tax rises are still expected. The government paid £8.4bn in debt interest in October, partly due to high inflation affecting inflation-linked gilts. Reeves will also announce cost of living measures, including a freeze on prescription charges.
The shadow chancellor criticised Labour’s spending plans, while the chief secretary to the Treasury stressed the need to bring public finances under control. The budget is set for Wednesday, with the OBR publishing new forecasts alongside it.
