October deficit reaches three-year high despite Hammond’s promise to end austerity
The UK recorded a much larger than predicted deficit for October, according to official data released today, the same month in which the government signalled an end to austerity measures.
Public borrowing rose to £8.8bn last month, up from £7.2bn in October last year, amounting to the largest October deficit for three years, according to data from the Office for National Statistics (ONS).
It comes after chancellor Philip Hammond promised the end of austerity is coming with an autumn Budget that prioritised spending.
However, borrowing for the year to date stood at £26.7bn, the lowest for 13 years, and £11.2bn less than in the same period last year.
Tax receipts grew 1.2 per cent year on year to £59.9bn, but could not match total government spending growth of 7.7 per cent, hitting £65.4bn.
Much of that spending increase came from a higher outlay on goods and services as well as social benefits, the ONS said.
Meanwhile, chief economic adviser to the EY ITEM Club, Howard Archer, said tax receipts were well below the average increase for the fiscal year so far.
"While held back by lower interest and dividend receipts, this could also tie in with the economy seemingly losing momentum recently after a strong summer," he said.
Debt excluding Bank of England quantitative easing stood at £1.6 trillion at the end of October, equivalent to 75 per cent of GBP – a decrease of £33.6bn on the same period a year earlier.