UK gov’t borrowing higher as energy bill support help begins

• Posted on November 22, 2022November 22, 2022
• by Nana Kwesi Coomson
• Comment

Government borrowing rose in October from a year ago as the UK started paying for energy support schemes for households and businesses.

Borrowing – the difference between government spending and tax income – was £13.4bn last month, the Office for National Statistics (ONS) said. 

The figure was £4.4bn higher than last year and was the fourth highest figure for October on record.

However, October’s figure was below the £21bn predicted by analysts.

Chancellor Jeremy Hunt said people needed support through the aftershocks of Russia’s invasion of Ukraine.

However, he said the public finances needed to be put “back on a more sustainable path” so Britain could “tackle inflation and ensure the economic stability needed for long-term growth”.

Energy support

October saw the first payment to households under the Energy Bills Support Scheme, under which the government is giving all households £400 towards the cost of their energy bills. The ONS said this cost the government £1.9bn last month.

In addition, October also saw the start of the Energy Price Guarantee schemes, which caps the annual energy bill of a typical household to £2,500 and also provides support for businesses.

Michal Stelmach, senior economist at KPMG, said borrowing in October “was largely driven by the energy price cap for households which came into force in October and the furlough scheme ending a year ago, making the annual comparison less flattering”.

“The public finances continue to face a tug of war between demand for energy support and the overarching need to balance the books,” he said.

-BBC