Updated December 21st, 2023 at 14:00 IST
UK budget deficit surges to £14.3 billion in November
UK's first eight months budget deficit hits £116.4 billion, up £24.4 billion from last year, with public debt at £2.67 trillion, 97.5% of GDP.
Britain posted a higher-than-expected budget deficit of 14.3 billion pounds ($18.1 billion) in November, against the economists estimated net borrowing at 12.9 billion pounds, adding to the strain on the public finances. More than estimated budget deficit leaves limited room for pre-election tax cuts by PM Rishi Sunka’s government.
According to the office for National Statistics, for the first eight months of the financial year totalled 116.4 billion pounds, 24,4 billion pounds higher than the April-November period a year earlier. As per the data, public sector net debt, excluding state owned banks, stood at 2.67 trillion pounds, equivalent to 97.5 per cent of economic output.
The borrowing by the British government went up as the government supported the economy during the COVID pandemic and then as it provided massive aid to households and businesses to offset the surge in energy prices in 2022.
On Wednesday, British annual consumer price inflation fell to 3.9 per cent in November from 4.6 per cent in October. UK’s November inflation was lesser than what economists estimated. A Reuters poll of economists had pointed to a reading of 4.4 per cent. At 3.9 per cent, the inflation is lowest since September 2021.
The data on Wednesday showed that Headline CPI fell by 0.2 per cent month on month, compared to a consensus forecast of a 0.1 per cent increase. On the other hand, core CPI-which excludes volatile food, energy, alcohol and tobacco prices — came in at an annual 5.1 per cent, well below a 5.6 per cent forecast. The Bank of England last week kept the hawkish tone intact and kept the main interest rate unchanged at 5.25 per cent. The Monetary Policy Committee reiterated that policy is “likely to need to be restrictive for an extended period of time.”
(With Reuters Inputs)
Published December 21st, 2023 at 14:00 IST