Government borrowing for September third highest on record

Government borrowing increased last month to its third highest level since records began in January 1993.

Official figures show borrowing – the difference between spending and tax receipts – hit £16.6bn last month.

The Office for National Statistics (ONS) said the figure was a £2.1 billion increase on September last year.

It is the last set of official public finance data before next week’s budget, where the Treasury is expected to change its self-imposed debt rules.

The monthly figures were below economists’ expectations, who had expected borrowings of 17.5 billion pounds in September.

Jessica Barnaby, deputy director for public sector finance at the ONS, said: “While tax receipts rose, this was offset by higher spending, partly due to higher interest on debt and rising public sector wages.”

However, the figure is still higher than previous forecasts by the Office for Budget Responsibility (OBR), which oversees UK government spending plans and performance.

Chief Treasurer Darren Jones said the new Labor government had inherited a fiscal “black hole” from the previous government and that addressing the problem “will require tough decisions in next week’s budget”.

Increased borrowing means Britain’s national debt now accounts for 98.5% of its economic output, down slightly from last month but still around levels last seen in the early 1960s.