Government borrowing rose more than expected in December, hitting its highest level for the month for four years, official figures show.
Borrowing – the difference between spending and tax revenue – was £17.8bn last month, £10.1bn more than in December 2023, the Office for National Statistics (ONS) said.
Spending on public services, benefits, and debt interest were all up on the year, the ONS said, while an increase tax take was offset by a cut to National Insurance by the previous government.
The increased borrowing comes after interest rates paid on government debt surged earlier this month before falling back.
The spike in borrowing costs threatens the government’s economic plans, with Chancellor Rachel Reeves facing pressure after figures last week showed the UK economy had flatlined.
The government has said growing the economy is its main priority in order to boost living standards.
Last month, the interest charged on government debt was £8.3bn, which was £3.8bn more than it was the year before.
The amount marked the third-highest December debt interest repayments since monthly records began in January 1997.
Alex Kerr, UK economist at Capital Economics, said against the backdrop of sluggish economic growth and high interest rates, “December’s overshoot in borrowing is further disappointing news for the chancellor”.
He said the majority of the higher borrowing was due to a one-off £1.7bn payment from the government to the private sector to repurchase military accommodation.
Following the release of the figures, Chief Secretary to the Treasury Darren Jones said the government would “root out waste to ensure every penny of taxpayer’s money is spent productively”.
“Economic stability is vital for our number one mission of delivering growth,” he added.
