Government borrowing in August highest since Covid – MASHAHER

Government borrowing in August rose to the highest level for the month since the Covid pandemic in 2021.

Official figures show that borrowing – the difference between spending and tax revenue – reached to £13.7bn last month, £3.3bn more than in August last year.

The Office for National Statistics (ONS) said that tax income “grew strongly” but this was outweighed by some benefits being increased and higher spending public services, including pay.

The figures are released as the government prepares for the Budget at the end of October, which Prime Minister Sir Keir Starmer has warned will be “painful”.

The ONS said higher benefits spending was largely due to payments being increased in line with inflation. A number increased including the carer’s allowance and the disability living allowance.

Inflation also pushed up running costs for public services, it added.

Increased borrowing in August means that national debt remained at levels last seen in the early 1960s, with the ONS estimating it to be equivalent to the entire size of the UK’s economy.