UK government borrowing falls to 11.6bn in December

"Public sector net borrowing the difference between spending and income was 11.6bn last month, the Office for National Statistics said, compared with 18.7bn in the same month a year earlier. Economists polled by Reuters had expected borrowing to be 13bn in December. The figure is closely watched by the City as it shows how much the government is borrowing to finance its spending plans and whether it is exceeding its target for the year."

"Borrowing in the financial year so far to December was 140.4bn, down 300m compared with the same period last year. Borrowing in the previous months of the year was also revised down by a combined 3.5bn. Tom Davies, a senior statistician at the ONS, said: Borrowing in December was substantially down on the same month in 2024, as a result of receipts being up strongly on last year whereas spending is only modestly higher."

"The chancellor, Rachel Reeves, has made reducing government borrowing a priority, especially because the charge on its debt is currently so high, with 1 in every 10 spent going on debt interest. The ONS figures show that interest costs accounted for 9.1bn of the 11.6bn of net government borrowing in December. Dennis Tatarkov, a senior economist at KPMG UK, said this iwas likely to ease in the coming months."

Public sector net borrowing was £11.6bn in December, down from £18.7bn in the same month a year earlier and below economists' expectations of £13bn. Year-to-date borrowing to December stood at £140.4bn, £300m lower than the same period last year, with prior months revised down by £3.5bn. Receipts rose strongly while spending was only modestly higher. Interest costs were high, accounting for £9.1bn of December's borrowing. The chancellor has prioritized reducing borrowing and announced £26bn in tax rises in the autumn budget. Expected interest rate cuts and an end to quantitative tightening could reduce borrowing costs.

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