UK borrowing hits record high

Soaring energy costs are pushing government debt higher, according to official data.

The British government borrowed a record £22 billion ($27 billion) in November, the highest monthly figure since records started in 1993, the Office for National Statistics (ONS) has revealed.

According to its report on Wednesday, the figure is £13.9 billion more than the same month in 2021, as the country has been hit by soaring natural gas prices that have forced the government to subsidize heating and electricity costs for millions of households and businesses.

The ONS data showed that public sector net borrowing (excluding banks bailed out during the financial crisis) was £105.4 billion in the financial year to November 2022, the fourth highest year-to-date total since 1993 and £50.8 billion higher than in 2019.

The report comes as the British government is facing a wave of strikes by public sector workers, who are demanding a wage increase due to rising inflation. These include nurses and ambulance drivers, as well as workers in the railway industry, which is heavily dependent on subsidies.

In response, Finance Minister Jeremy Hunt has said he will not change his spending plans. According to Reuters, these allow no scope for public-sector pay to keep up with inflation, which hit a 41-year high in October.

“We have a clear plan to help halve inflation next year, but that requires some tough decisions to put our public finances back on a sustainable footing,” Hunt said.

Official data shows that inflation, which slowed from a peak of more than 11% in October to 10.7% last month, is still near its highest since the early 1980’s.

Last month, the British government’s Office for Budget Responsibility revised up its forecast for borrowing in 2022/23 to £177 billion, or 7.1% of GDP, from an earlier estimate of £99.1 billion.