Government borrowing rises to £13.7bn in August

Published On Sep 20, 2024, 2:26 AM

In August, the UK government's borrowing increased to £13.7 billion, up by £3.3 billion from the previous year. This rise is attributed to higher spending on benefits and public services, despite a significant growth in tax income. Notably, the increase in benefits included the carer's allowance and the disability living allowance. This level of borrowing is the highest for August since the Covid pandemic in 2021.

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Increased government borrowing can lead to higher interest rates as the government may need to issue more debt to finance the deficit. This can also raise concerns about inflation and economic stability in the long term. Investors should be cautious of sectors that may suffer from increased borrowing costs or inflation fears.

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