Britain had its highest October borrowing outside of Covid as Labor slashed public sector wages and services.
Government borrowing reached £17.4billion last month, higher than the £13.3billion analysts had predicted.
The official figure was only higher in October once since records began – when the pandemic hit in 2020.
The bleak data raises fresh questions about the direction Keir Starmer and Rachel Reeves are taking – who three weeks ago announced a Budget of extraordinary tax increases, extra borrowing and spending.
Experts warn that the untenable situation could lead to the Chancellor beating the Brits again in the coming years, even though the burden has been set to reach its peak.
The Office for National Statistics (ONS) said public sector net debt was £1.6 billion higher than in the same month last year.
Interest on the dreaded central government debt rose to £9.1 billion for the month – the highest figure since October.
Government borrowing reached £17.4billion last month, higher than the £13.3billion analysts had predicted
The grim data will raise new questions about the direction Keir Starmer and Rachel Reeves are taking
Since the fiscal package on October 30, the market has increased the cost of servicing the debt mountain of 2.8 trillion in the UK more,
ONS deputy director for public sector finance Jessica Barnaby said: ‘This month’s debt is the second in October since monthly records began in January 1993.
‘Despite the reduction in national insurance main rates at the beginning of 2024, total receipts increased last year.
‘However, with spending on public services, benefits and debt interest costs all rising over the past year, expenditure has risen faster than overall revenue.’
Shadow chancellor Mel Stride said: ‘Today’s figures show the highest monthly borrowing outside of the pandemic.
“This is a direct result of Labor’s decision to give inflation-busting pay rises to union employers without reform. And this is before the impact of the Budget…’
Capital Economics warned that more tax increases could happen.
“October’s disappointing public finance figures underline the fiscal challenges the Chancellor still faces, despite the big increases in spending and taxes announced in the Budget,” analysts said.
‘And while the Chancellor has downplayed the possibility of tax-raising steps further, if he wants to increase daily spending in the future of the year, he may have to raise taxes to pay for it.’
Chief Secretary to the Treasury Darren Jones said: ‘We have a £22billion black hole in the public finances from the previous government.
“In the Budget, we are solving this, fixing the foundations and putting public finances in a sustainable way to rebuild the country.
The ONS said central government department spending on goods and services increased by £2.5billion to £36.9billion in October on the back of ‘pay rises and inflation increasing running costs’.
This includes the impact of above-inflation pay offers announced after the Labor Government took office, with NHS staff and teachers witnessing pay rises that have been backdated since last month.
Total central government spending was £88.5billion in October 2024, £3.9billion more than the same month last year.
Meanwhile, central government receipts – the amount of money it receives, mainly through taxes – rose by £2.9 billion to £81.2 billion for the month.
The increase was supported by an increase in corporate tax and income tax payments.
The ONS said public sector net debt totaled £96.6 billion for the financial year to October, as new figures show.
He added that public debt, excluding state ownership in banks, was about 97.5 percent of GDP at the end of October.
Interest on the dreaded central government debt rose to £9.1 billion for the month – the highest figure since October
