Public borrowing jumped in September, highlighting the pressure on public finances even before Liz Truss’s disastrous tax-cutting fiscal plans.
In the last set of figures before Chancellor Jeremy Hunt unveils a new tax and spending plan, the Office for National Statistics (ONS) said the Government borrowed £20bn last month to plug the gap between tax receipts and public spending.
This was the second highest September borrowing figure since monthly records began in 1993, surpassed only by the amount borrowed during the pandemic.
It is also £5.2bn more than forecast by the Office for Budget Responsibility (OBR), the Government’s tax and spending watchdog, in March.
The public finances have been in the spotlight in recent weeks after Ms Truss’s unveiled a huge package of unfunded tax cuts, sparking market turmoil as investors worried about the impact on UK debt.
Even after new Chancellor Jeremy Hunt ditched most of the measures, he still needs to find tens of billions of savings to plug the gap.
Separate figures this morning showed retail sales slumped by more than expected in September, fuelling fears of a looming recession.
Retail sales dropped 1.4pc last month, according to the ONS, with retailers saying the extra Bank Holiday for the Queen’s funeral was partly to blame.
The pound extended its losses following the gloomy reports, slumping 0.5pc against the dollar to $1.1178.
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