UK government takes a breath as borrowing figure eases to £11.6bn in December.
A welcome relief for the Chancellor's efforts to curb rising debt levels came in the form of official figures released by the Office for National Statistics (ONS), showing that the UK government borrowed less than anticipated in December, with public sector net borrowing at £11.6 billion. This represents a significant reduction compared to the same period last year, when borrowing stood at £18.7 billion.
While economists had expected borrowing to reach £13 billion, the actual figure was lower due to stronger-than-expected receipts, according to Tom Davies, a senior statistician at the ONS. "Borrowing in December was substantially down on the same month in 2024," he noted, citing strong increases in income as one of the key drivers.
The news comes as Chancellor Rachel Reeves continues her mission to reduce government borrowing, with interest costs currently accounting for £1 in every £10 spent. The latest ONS figures show that interest costs took up £9.1 billion of the total net government borrowing in December.
Dennis Tatarkov, a senior economist at KPMG UK, believes that this is likely to be a temporary reprieve, however. With interest rate cuts expected later this year and the eventual end of the Bank of England's quantitative tightening programme on the horizon, borrowing costs are set to decrease, potentially creating more room for public spending.
Reeves' tax rises announced in her autumn budget will continue to play a key role in financing government spending, with the Chancellor having implemented a fiscal rule requiring day-to-day spending to be funded through taxes. The Office for Budget Responsibility (OBR) has projected that borrowing will decrease significantly over the coming years, falling from £152.6 billion last year to £67 billion by 2031.
The latest figures provide some respite for Reeves and her team, but it remains to be seen how long this trend will persist. One thing is certain, however: reducing government debt has become an urgent priority, with the current level of borrowing weighing heavily on taxpayers' wallets.
A welcome relief for the Chancellor's efforts to curb rising debt levels came in the form of official figures released by the Office for National Statistics (ONS), showing that the UK government borrowed less than anticipated in December, with public sector net borrowing at £11.6 billion. This represents a significant reduction compared to the same period last year, when borrowing stood at £18.7 billion.
While economists had expected borrowing to reach £13 billion, the actual figure was lower due to stronger-than-expected receipts, according to Tom Davies, a senior statistician at the ONS. "Borrowing in December was substantially down on the same month in 2024," he noted, citing strong increases in income as one of the key drivers.
The news comes as Chancellor Rachel Reeves continues her mission to reduce government borrowing, with interest costs currently accounting for £1 in every £10 spent. The latest ONS figures show that interest costs took up £9.1 billion of the total net government borrowing in December.
Dennis Tatarkov, a senior economist at KPMG UK, believes that this is likely to be a temporary reprieve, however. With interest rate cuts expected later this year and the eventual end of the Bank of England's quantitative tightening programme on the horizon, borrowing costs are set to decrease, potentially creating more room for public spending.
Reeves' tax rises announced in her autumn budget will continue to play a key role in financing government spending, with the Chancellor having implemented a fiscal rule requiring day-to-day spending to be funded through taxes. The Office for Budget Responsibility (OBR) has projected that borrowing will decrease significantly over the coming years, falling from £152.6 billion last year to £67 billion by 2031.
The latest figures provide some respite for Reeves and her team, but it remains to be seen how long this trend will persist. One thing is certain, however: reducing government debt has become an urgent priority, with the current level of borrowing weighing heavily on taxpayers' wallets.
this is a big deal, especially with interest rates expected to drop later this year... it's like a big ol' bucket of sunshine for the economy 
! i do think Dennis Tatarkov has a point though - this is probably just a temporary reprieve... but hey, every little bit counts, right? 
. I mean, £18.7bn was a pretty big number and I thought for sure it'd be even worse 
. Guess all that tax increase is starting to pay off for them 
. Anyway, interest costs are still kinda high at 9.1 billion though, so not like they're totally out of the woods yet 
. Plus, Dennis Tatarkov makes a legit point that this is just temporary, with rate cuts on the horizon...
borrowing figs r actually quite decent 4 now, i mean £11.6bn isnt too shabby. but still gotta keep an eye on it, cant just get complacent & think everything's rosy 
. interest rates might drop soon tho, which would be great for the economy... but at the same time, it's not a permanent fix 
. Reeves is doing her best tho, and i'm all for her trying to cut down on tax rises 
gotta keep an eye on those projections from OBR though - £67bn by 2031 sounds doable? 
. But, I mean, Dennis Tatarkov is all like "hold on, this might be just a temporary reprieve"... and I'm over here like "can we PLEASE just enjoy the ride for now?" 
Still, it's def some positive news for the UK economy! 
. Interest costs are still high, though (£9.1 billion!), but at least they're decreasing 
. The tax rises announced by the Chancellor will still play a key role in funding spending, though 
. It's good to know that borrowing is expected to decrease significantly over the next few years, falling from £152.6 billion last year to £67 billion by 2031 
. Reducing government debt is super important, and I'm hoping it'll become a breeze soon 
its all about finding that balance between not overspending and paying off debt 
. Will we be back to seeing huge increases in borrowing before then? 
I'm surprised they're not more optimistic about this... it's only a temporary reprieve 
.
they're trying to cut debt levels but its still a thing that affects ppl's wallets 
its like a big goal for them
. It's great that Chancellor Reeves is working hard to cut down on debt levels because, let's be real, £1 in every £10 spent on interest costs isn't exactly cheap 
. And yeah, Reeves' tax rises are gonna play a big role in reducing borrowing over the coming years 
.
it'll be interesting to see how tax rises will play out in 2025 
, but let's get real for a sec... £11.6 billion still sounds like a pretty hefty chunk of change 
.
. Let's just hope she can keep it up and we don't find ourselves back in this same boat 
. Fingers crossed, guys 
interest costs are still a big thing tho, it's like the Chancellor is saying "hey, we need more taxes"