UK government borrowing hits February record on energy bill help

·2-min read
borrowing  British Chancellor Jeremy Hunt gestures before speaking to the media at Victoria Place Shopping Centre, Woking, in response to the Bank of England Monetary Policy Report, Thursday Feb. 2, 2023. PA Photo. (Jordan Pettitt/PA via AP)
Chancellor Jeremy Hunt said borrowing was 'still high'. Photo: Jordan Pettitt/PA via AP

UK public sector borrowing hit a new record in February, driven by the cost of the government’s energy support schemes.

Borrowing, the difference between spending and tax income, was £16.7bn, last month, the Office for National Statistics (ONS) said.

The ONS said the extra spending on energy subsidies in February 2023 compared with a year earlier was estimated to be about £9.3bn.

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The cost of energy support has now reached about £34bn since it was put in place last October.

The Treasury kept household energy bills at £2,500 a year on average under its Energy Support Scheme.

The latest ONS data also revealed that £6.9bn of interest payable on debt also pushed February borrowing higher, although this was down by £1.3bn — the first fall in debt interest payments since April 2021 due to easing inflation.

Public sector borrowing was the highest February figure since monthly records began in 1993 and higher than the £11.7bn expected by most economists. It takes the year-to-date total to £132.2bn

Chancellor Jeremy Hunt said borrowing was "still high" because the government was supporting households with the rising cost of living.

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Hunt said: “Borrowing is still high because we’re determined to support households and businesses with rising prices and are spending about £1,500 per household to pay just under half of people’s energy bills this winter.

The ONS said £5bn was raised through the new windfall tax on UK energy company profits. Tax income was also £5bn higher than a year ago at £77.8bn.

“What will bring these costs right down is lower inflation, which is why it remains one of our top priorities to halve it this year, alongside growing our economy and reducing debt.”

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