Energy support and soaring debt interest sends public borrowing to new record

The mounting cost of the Government’s energy support schemes and soaring debt interest pushed state borrowing to another record last month as sky-high inflation and power bills

took their toll. The Office for National Statistics (ONS) said government borrowing reached a far higher-than-expected £27.4 billion last month, jumping by £16.7 billion

year-on-year and marking the highest monthly figure for December borrowing since records began in 1993. Most experts had been forecasting borrowing of £17 billion for

December. The official figures showed borrowing was sent rocketing higher by nearly £7 billion in costs from energy support schemes, with the ONS estimating the Government

spent £5 billion last month on its energy price guarantee capping annual bills, with a further £1.9 billion paid out for power bill support payments. Interest payments on

government debt jumped to £17.3 billion in December – the highest December on record and the second largest in any single month – as a result of sky-high inflation. Of this,

£13.7 billion reflects the impact of Retail Prices Index (RPI) inflation on debt interest payments, according to the ONS. In the financial year to December, the Government’s

debt interest bill jumped to £87.8 billion and Britain’s fiscal watchdog, the Office for Budget Responsibility (OBR), is estimating it will rise to £115.7 billion by the end of

the full year in March. Chancellor Jeremy Hunt said the Government was making “tough decisions to get debt falling”. He said: “Right now we are helping millions of

families with the cost of living but we must also ensure that our level of debt is fair for future generations.