Government support for households and businesses with energy bills and higher interest payments pushed UK public borrowing to a record £22bn in November, the highest level for the month since records began.
The Office for National Statistics (ONS) said the state spent more than it received in taxes and other income, meaning it had to borrow £13.9bn more in November than a year earlier, taking borrowing to its highest level for the period since monthly data started being issued in 1993.
Public sector borrowing was also higher last month than during the depths of the coronavirus pandemic when the government launched huge spending schemes to support consumers and businesses during successive lockdowns.
Cost of living payments to help people and businesses with soaring energy bills were largely responsible for increasing assistance payments to £13.2bn, which was £3.3bn higher than a year earlier.
The impact of inflation is also making itself felt in the government’s finances. Since mid-2021 it has had to pay more interest on its debt, the ONS said, mostly as a result of higher inflation.
The interest payable on UK government bonds – known as gilts – is linked to the higher retail prices index level of inflation.
The interest needed to be paid on central government debt was £7.3bn in November, of which an underlying £4.3bn reflected the impact of inflation. The interest payable was £2.4bn more than in November 2021 and the highest since the monthly index of that measure began in 1997.
The government’s energy bills support scheme – which provides households with £400 towards the cost of the their energy bills paid out in six evenly spread instalments between October and March – cost the government £1.9bn in November.
The ONS said it could not yet fully calculate the monthly cost of additional government spending to help with energy bills, under the energy price guarantee scheme, which caps the average bills for households and the energy bill relief scheme for businesses, and which began in October.
Public sector net borrowing in the first eight months of the 2022-23 financial year was £105.4bn, which was the fourth highest financial year in the period to November since records began 1993, and £50.8bn higher than November 2019, before the pandemic.
Public sector net debt, excluding bailed-out banks, hit 98.7% of GDP in November, which was a decrease of 0.3 percentage points of GDP when compared with the same month a year earlier.