UK government borrowing falls in February

by | Mar 22, 2022

Share this article

Image of money

UK government borrowing fell in February, according to figures released on Tuesday by the Office for National Statistics.
The gap between spending and income came in at £13.1bn, down £2.4bn on the same month a year earlier, but marking the second-highest borrowing figure for February since records began in 1993. This was above expectations of £8.5bn and the Office for Budget Responsibility’s forecast of £8.0bn.

Compared with February 2020, before the pandemic hit, borrowing was up £12.8bn.

The data showed that interest payment on government debt surged 52.7% from a year earlier to a record £8.2bn last month amid soaring inflation.


The figures also showed that borrowing is now £25.9bn lower than the OBR expected for the year so far, and less than half of what was recorded last year, at £138.4bn..

Martin Beck, chief economic advisor to the EY ITEM Club, said: “While the Chancellor can take heart from a decreasing deficit as he prepares for Wednesday’s Spring Statement, recent geopolitical developments point to a tougher 2022-2023.

“Rising energy and commodity prices means inflation this year is on course to exceed the OBR’s forecast by a significant margin. By depressing real income growth, high inflation will weigh on economic activity and employment, negatively affecting tax receipts. It will also add further to the interest cost of inflation-linked gilts.


“Borrowing may also be lifted if the Chancellor responds to recent calls for more fiscal activism to alleviate cost of living pressures, such as cutting fuel duty or raising benefits. With so many moving parts, and uncertainty over how much of the recent strength in tax receipts will prove persistent, predicting the medium-term fiscal outlook is tricky. But we won’t have to wait long for more clarity.”

Share this article

Related articles

UK inflation hits 40-year high of 10.1%

UK inflation hits 40-year high of 10.1%

Higher food prices helped push up inflation in September, official data showed on Wednesday, to a record 10.1%. According to the Office for National Statistics, the consumer price index rose by 10.1% in the 12 months to September, compared to August's rate of 9.9%....

Reports of delay to bond sale ‘inaccurate’ – BoE

Reports of delay to bond sale ‘inaccurate’ – BoE

The Bank of England appeared to deny reports on Tuesday that it wanted to delay selling billions of pounds of government bonds. The central bank acquired £838bn of gilts during its quantitative easing programme. It had intended to start selling them on 6 October, but...

Trending articles

IFA Talk logo

IFA Talk is our flagship podcast, designed to fit perfectly into your busy life, bringing the latest insight, analysis, news and interviews to you, wherever you are.

IFA Talk Podcast - listen to the latest episode