Highest ever October state borrowing costs, official figures show
Public sector borrowing reached the second highest level for any October since records began, according to official figures, casting doubt on the prime minister’s pledge to cut debt and the chancellor’s capacity to cut taxes.
Public sector net borrowing was £14.9bn last month, £4.4bn more than the same point last year and the second highest since monthly records began in 1993, the Office for National Statistic (ONS) said.
Only once before, in the pandemic year of 2020, was a higher amount borrowed in October.
High borrowing costs, thanks to high interest rates and bond yields having neared a 15-year high, are part of the reason.
The interest payable was the highest on record for any October since such figures began being collated by the ONS.
Interest payments were £1.1bn more expensive than October last year, reaching £7.5bn. It is an even greater amount than the Office of Budget Responsibility’s (OBR) forecast of £4.9bn.
One of Prime Minister Rishi Sunak’s five promises is to reduce government debt, which arises when the state spends more money than it takes in from taxes.
Across the seven months to October 2023 debt was up £21.9bn compared with the same seven months in 2022, totalling £98.3bn.
But the sum was £16.9bn less than the £115.2bn forecast by the OBR in March.
The ONS data is the last set before the mini-budget speech to be delivered by Chancellor Jeremy Hunt in the Commons on Wednesday.
He had signalled months ago that the prospects for a series of giveaways was not in his immediate plans, despite pressure from Tory MPs for sweeteners to bolster the party’s fortunes in the polls.
However, the tune from Downing Street has changed significantly over the past few days, with Mr Sunak saying on Monday it was time for the government to “begin the next phase” of its plan and “turn our attention to cutting tax”.
It is believed some personal taxes could be cut to help boost growth and help working families with the cost of living.
At the weekend Mr Hunt also pledged to “remove the barriers that stop businesses growing”.
The chancellor had told Sky News in October that OBR’s new economic forecasts, to be revealed alongside the autumn statement, would be considerably worse than at the time of the spring budget.
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Chancellor: ‘Tax burden is too high’
Efforts to cut benefit bills and get 1.1 million classed as economically inactive into employment were revealed on Thursday last week as part of the chancellor’s Back to Work Plan.
It was the first pre-announcement of the autumn statement.
The run-up to a major fiscal event is often littered with such things – and leaks.
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Labour’s plans for the economy
Mr Hunt is facing a clamour of demands for aid – not least from charities which warn that millions of families need additional support to get them through another tough winter for household budgets.
Inflation figures last week may have shown that the pace of price increases has more than halved this year, meeting the government’s target, but bills for energy remain £1,000 above pre-pandemic levels and other essentials such as food are still rising in double-digits.
Key announcements are due on Wednesday over the government’s commitment to the pensions triple lock and whether working age benefits will rise in line with September’s inflation figure.
Read more:
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Business aid may come in the form of tax relief.
A coalition of hospitality businesses called on the chancellor last week to freeze business rates and extend reliefs.
They argued that a fresh tax burden would force up costs and spark a flood of closures.
In response to Tuesday’s figures, Mr Hunt said: “We met our pledge to halve inflation, but we must keep on supporting the Bank of England to drive inflation down to 2%. That means being responsible with the nation’s finances.
“At my autumn statement tomorrow, I will focus on how we boost business investment and get people back into work to deliver the growth our country needs.”
An investigation has been launched into a former Reform MP over alleged racial abuse against a Sky News journalist.
The parliamentary standards commissioner is investigating James McMurdock, who was elected as a Reform MP last year but suspended himself after allegations emerged over loans he claimed during the pandemic.
Ben Obese-Jecty, the Conservative MP, wrote to the watchdog in August to urge an investigation into Mr McMurdock’s “use of social media to apparently facilitate racial abuse” against Sky News political correspondent Mhari Aurora.
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The standards commissioner has now confirmed it will consider allegations that Mr McMurdock started an “N-Tower” on social media by posting the single letter “N” under an X post that was critical of Aurora.
This was described by Mr Obese-Jecty as “a means of using a racial slur against an individual on an online platform whilst circumventing moderation that would remove racially abusive content”.
He added: “The practice involves spelling out a racial slur vertically with each individual posting a single letter of the word in order to spell it vertically” as the posts appear below each other.
Mr McMurdock is under investigation for potentially breaching rule 11 of the House of Commons Code of Conduct.
This states: “Members shall never undertake any action which would cause significant damage to the reputation and integrity of the House of Commons as a whole, or of its Members generally.”
Ben Obese-Jecty. Pic: Parliament
Mr Obese-Jecty said in his complaint that the alleged actions of the former Reform MP “reflect a lack of adherence” to the seven principles of public life.
He said by “deleting the post without challenging the subsequent spelling” that was started by him, Mr McMurdock showed a “failure to challenge poor behaviour” and “absence of moral courage”.
Mr Obese-Jecty added: “Having repeatedly experienced this specific type of online racial abuse myself I am horrified that a fellow member of parliament would apparently see this as a legitimate means of challenging a Westminster lobby journalist in a public forum.
“I sincerely hope that there is a coherent and believable explanation for this horrendous action.”
At the time, Mr McMurdock appeared to deny he made the post, sharing a screenshot of X’s AI assistant Grok claiming he never posted the letter N, based on a screenshot of the N-Tower.
Grok is a large language model, which is known to be inaccurate.
He added that Mr Obese-Jecty’s “complaint regarding the alleged posting of a single letter is beyond ridiculous”.
Mr McMurdock has been contacted for comment.
Another former Conservative MP has defected to Reform UK.
Maria Caulfield, who served as the MP for Lewes for nearly a decade, as well as a government minister, is the 13th ex-Tory to join Nigel Farage’s party, which continues to gather momentum.
The announcement of her move on Tuesday follows sitting MP Danny Kruger’s decision to defect yesterday and head up Reform’s work to prepare for government.
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Ms Caulfield, a former health minister, told GB News: “If you are Conservative right-minded, then the future is Reform. The country is going to change a lot.
“The same people who thought that Brexit would not happen think that Reform will not happen. They are in for a shock.”
She added: “I have joined. My husband joined a few months ago and I joined a month ago.”
Reacting to the defection, Tory leader Kemi Badenoch admitted her party is having a “tough and bumpy time”, but reiterated her argument that it takes time to develop policies, and called on the public and her party to be patient.
Ms Caulfield is a former nurse, and her first ministerial job came in 2021, when she joined the Department for Health in Boris Johnson’s government.
After a spell on the backbenches during the brief premiership of Liz Truss, she was brought back into government under Rishi Sunak, becoming the minister responsible for mental health and women’s health.
She lost her seat at the 2024 general election to the Liberal Democrats, with her vote share having plummeted by nearly 22%.
‘We need to hold our nerve’
Her announcement follows that of Danny Kruger, the MP for East Wiltshire, who announced his move at a press conference alongside Nigel Farage on Monday.
He said the Conservative Party is “over”, and Reform is now the primary vehicle for conservatism.
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Sitting MP Danny Kruger defects to Reform UK.
But shadow chancellor Sir Mel Stride said his analysis was “profoundly wrong”.
He told BBC Radio 4’s Today programme: “It is certainly the case that we had a devastating defeat about a year ago, that we lost that connection with the electorate, that trust with the electorate, and it is also true that it will take us time to rebuild that.”
He added: “We need to hold our nerve.”
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