UK budget deficit surges in December as debt interest hits

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Finance

Posted By Global Banking and Finance Review

Posted on January 22, 2025

UK budget deficit surges in December as debt interest hits

(Reuters) - Britain ran a bigger-than-expected budget deficit in December, swelled by debt interest and a one-off purchase of military homes, data showed on Wednesday that underlined the fiscal pressure faced by finance minister Rachel Reeves.

Public sector net borrowing was 17.8 billion pounds ($21.93 billion) in December, the Office for National Statistics said.

Economists polled by Reuters had a median forecast of 14.1 billion pounds for headline public sector net borrowing.

The ONS said the government racked up an 8.3 billion-pounnd debt interest bill in December, the third-highest December total on record. A 1.7 billion-pound payment for the repurchase of military dwellings added to borrowing.

Britain's government has borrowed 129.9 billion pounds over the first nine months of the 2024/25 financial year, the ONS said - more than the Office for Budget Responsibility's forecast for 125.9 billion pounds at this point of the year.

($1 = 0.8118 pounds)

(Reporting by Andy Bruce; editing by William Schomberg)

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