UK borrows more than expected in December

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The UK government borrowed more than expected in December, underscoring the challenge facing Chancellor Rachel Reeves as she tries to restore confidence in her budget plans and jump-start growth.

Borrowing – the difference between public sector spending and revenue – was £17.8bn last month, up from £10.1bn in December 2023 and the highest December borrowing for four years, Office for National Statistics data showed on Wednesday.

It was above the £14.1bn expected by economists in Reuters, and compared with the £14.6bn forecast by Britain’s Office for Budget Responsibility.

In the first nine months of the fiscal year, borrowing was £129.9 billion, £8.9 billion higher than in January 1993. £125.9bn OBR forecast.

Reeves sought to reassure investors this month after the UK’s borrowing costs hit their highest level since the global financial crisis, threatening its ability to meet a self-governing fiscal policy where day-to-day spending is funded by tax receipts.

UK borrowing costs fell after data last week showed inflation unexpectedly fell in December and global bond sales slowed.

But the government is under pressure to turn around an economy that grew just 0.1 percent in November after mild contractions in September and October.

This is a developing story.