Government borrowing hit an ‘eye-watering’ £21.5bn last month – the second highest ever – with Jeremy Hunt saying he is supporting families with cost of living despite soaring taxes
Government borrowing hit £21.5billion last month as the cost of energy bills support and debt interest outweighed soaring taxes.
The figure was the second highest on record for March and £16.3billion above the same period last year, with Jeremy Hunt admitting it was ‘eye-watering’ and cannot go on ‘forever’.
The ONS said the borrowing was £139.2 billion for 2022-23 as a whole, £18.1billion more than the previous year.
However, in a bright spot for the Chancellor it was lower than the £152.4billion predicted last month by the Office for Budget Responsibility watchdog just last month – reflecting the economy holding up better than anticipated.
After tax thresholds remained frozen, some £81billion was raised – £1.6billion more than March last year. But spending was up by £15.1billion to £104.7billion.
The national debt mountain is now more than £2.5trillion, or 99.6 per cent of GDP – the highest ratio since the early 1960s.
The figure was the second highest on record for March and £16.3billion above the same period last year, with Jeremy Hunt admitting it was ‘eye-watering’
The Treasury splurged £41.2billion over the past six months to support households and businesses with energy costs.
Meanwhile, sky-high inflation also pushed debt interest payments on public sector debt to £106.6billion – 47 per cent higher than the previous year.
Mr Hunt said the Government was right to spend on energy support in the cost-of-living crisis, but warned ‘we cannot borrow forever’.
He said: ‘These numbers reflect the inevitable consequences of borrowing eye-watering sums to help families and businesses through a pandemic and (Vladimir) Putin’s energy crisis.’
He added: ‘We stepped up to support the British economy in the face of two global shocks, but we cannot borrow forever.
‘We now have a clear plan to get debt falling, which will reduce the financial pressure we pass on to our children and grandchildren.’
Interest on the government’s debt has spiked as much of it is linked to RPI inflation
The extra government spending has been partly offset by higher tax take