Government borrowing rose to the highest amount since the pandemic in July, official figures show, as public sector pay increased.
Not since 2021 has there been a July with such high borrowing, according to data from the Office for National Statistics (ONS).
It means there was a £3.1bn difference between what the government took in from things such as taxes and how much was spent on public sector services. The government has committed to borrowing only to invest and to bring down debt.
The sums are also higher than expected when looked at across a four-month period.
Independent forecasters the Office for Budget Responsibility (OBR) expected borrowing to be £4.7bn less and come in at £46.6bn. Instead, it reached £51.4bn.
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2:32
Sky’s business correspondent Paul Kelso has been analysing what cuts chancellor Rachel Reeves has announced and whether tax rises are inevitable.
Why has borrowing gone up?
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While the government took in more money from income tax – that was offset by the increased cost of public services and benefits.
It’s been attributed to higher-than-forecast spending by government departments, which the OBR said “appears related to strong growth in public sector pay”.
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The trend of government spending is expected to continue.
“Data on central government spending remain highly provisional at this time of year. Nevertheless, they indicate that departmental spending for 2024-25 could significantly exceed the March 2024 forecast,” the OBR said.
The cost of borrowing that debt, measured by interest payments, was reduced, the ONS added.
What does it mean?
Despite better-than-expected economic growth in recent weeks Chancellor Rachel Reeves is widely expected to raise some taxes in her first October budget having said there is a £22bn black hole in the public finances.
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Today’s figures and comments from the Treasury are likely to add to that expectation as they illustrate the difficult choices Ms Reeves faces.
“Today’s figures are yet more proof of the dire inheritance left to us by the previous government,” chief secretary to the Treasury Darren Jones said.
“A £22bn black hole in the public finances this year, a decade of economic stagnation, and public debt at its highest level since the 1960s, with taxpayers’ money being wasted on debt interest payments rather than on our public services.
“We are taking the tough decisions that are needed to fix the foundations of our economy, modernise our public services and rebuild Britain so we can put more money back into people’s pockets across the country”.
Donald Trump may be denied the honour of addressing parliament on his state visit to the UK later this year, with no formal request yet submitted for him to be given that privilege.
Sky News has been told the Speaker of the House of Commons, Sir Lindsay Hoyle, hasn’t so far received a request to invite the US president to speak in parliament when he is expected to visit in September.
It was confirmed to MPs who have raised concerns about the US president being allowed to address both houses.
Kate Osborne, Labour MP for Jarrow and Gateshead East, wrote to the speaker in April asking him to stop Mr Trump from addressing parliament, and tabled an early-day motion outlining her concerns.
“I was happy to see Macron here but feel very differently about Trump,” she said.
“Trump has made some very uncomfortable and worrying comments around the UK government, democracy, the Middle East, particularly around equalities and, of course, Ukraine.
“So, I think there are many reasons why, when we’re looking at a state visit, we should be looking at why they’re being afforded that privilege. Because, of course, it is a privilege for somebody to come and address both of the houses.”
But the timing of the visit may mean that any diplomatic sensitivities, or perceptions of a snub, could be avoided.
Image: France’s President Emmanuel Macron addressed parliament during his state visit this month
Lord Ricketts, a former UK ambassador to France, pointed out that parliament isn’t sitting for much of September, and that could help resolve the issue.
In 2017, he wrote a public letter questioning the decision to give Donald Trump his first state visit, saying it put Queen Elizabeth II in a “very difficult position”.
Parliament rises from 16 September until 13 October due to party conferences.
The dates for the state visit haven’t yet been confirmed by Buckingham Palace or the government.
However, they have not denied that it will take place in September, after Mr Trump appeared to confirm they were planning to hold the state visit that month. The palace confirmed this week that the formal planning for his arrival had begun.
Image: Mr Trump has said he believes the trip to the UK will take place in September. Pic: Reuters
When asked about parliamentary recess potentially solving the issue, Ms Osborne said: “It may be a way of dealing with it in a very diplomatic way… I don’t know how much control we have over Trump’s diary.
“But if we can manoeuvre it in a way that means that the House isn’t sitting, then that seems like a good solution, maybe not perfect, because I’d actually like him to know that he’s not welcome.”
A message from the speaker’s office, seen by Sky News, says: “Formal addresses to both Houses of Parliament are not automatically included in the itinerary of such a state visit.
“Whether a foreign head of state addresses parliament, during a state visit or otherwise, is part of the planning decisions.”
Image: Mr Trump made his first state visit to the UK in June 2019 during his first presidency. File pic: Reuters
It’s understood that if the government agrees to a joint address to parliament, the Lord Chamberlain’s office writes to the two speakers, on behalf of the King, to ask them to host this.
It will be Mr Trump’s second state visit.
During his first, in 2019, he didn’t address parliament, despite the fact that his predecessor, Barack Obama, was asked to do so.
It was unclear if this was due to the fact John Bercow, the speaker at the time, made it clear he wasn’t welcome to do so.
However, it didn’t appear to dampen Mr Trump’s excitement about his time with the Royal Family.
Speaking earlier this year, he described his state visit as “a fest” adding “it’s an honour… I’m a friend of Charles, I have great respect for King Charles and the family, William; we have really just a great respect for the family. And I think they’re setting a date for September.”
It is expected that, like Mr Macron, the pageantry for his trip this time will revolve around Windsor, with refurbishment taking place at Buckingham Palace.
Fuel to the engines of the Air India plane that crashed last month appears to have cut off shortly after take-off, a preliminary report has found.
According to the report switches in the cockpit that controlled fuel moved to a “CUTOFF” position.
It said: “Engine 1 and Engine 2 fuel cutoff switches transitioned from RUN to CUTOFF position one after another with a time gap of one second.
“The Engine N1 and N2 began to decrease from their take-off values as the fuel supply to the engines was cut off.”
Image: The crash site. Pic: AAIB
There was then confusion in the cockpit. In the voice recording, one of the pilots is heard asking the other why he “cut off”. The other pilot responds that he did not do so.
There were no conclusions as to how the switches were moved.
One of the engines was able to be restarted, but could not reverse the plane’s deceleration, the report found.
“At this stage of investigation, there are no recommended actions to Boeing 787-8 and/or GE GEnx-1B engine operators and manufacturers,” India’s Aircraft Accident Investigation Bureau (AAIB) said in the report.
Image: A diagram in the report shows how the plane crashed into a building. Pic: AAIB
No significant bird activity was observed in the vicinity of the plane’s flight path, the report said. The aircraft started to lose altitude before crossing the airport perimeter wall, it added.
The plane plummeted into a busy area, killing 241 passengers and 19 others on the ground while incinerating everything around it.
The AAIB’s report is based on the initial findings of the probe, marking 30 days since the crash.
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Liverpool have retired the number 20 shirt in honour of Diogo Jota – the first time it has made such a gesture.
The club said it was a “unique tribute to a uniquely wonderful person” and the decision was made in consultation with his wife and family.
The number 20 will be retired at all levels, including the men’s and women’s first teams and academy squads.
A statement said: “It was the number he wore with pride and distinction, leading us to countless victories in the process – and Diogo Jota will forever be Liverpool Football Club’s number 20.”
The club called it a “recognition of not only the immeasurable contribution our lad from Portugal made to the Reds’ on-pitch successes over the last five years, but also the profound personal impact he had on his teammates, colleagues and supporters and the everlasting connections he built with them”.
Image: Jota’s wife joined Liverpool players to view tributes at Anfield on Friday. Pic: Liverpool FC
Image: Pic: Liverpool FC
Newly-married Jota died alongside his brother when his Lamborghini crashed in northern Spain on 3 July.