UK borrowing was surprisingly high last month as Europe cost the nation £1.5 billion more than last year, official figures showed today.
In December 2017 the Government received a £1.2 billion rebate from the European Union as changes to its budget saw significant returns to member states. But the effect was much smaller last month, resulting in a £300 million net contribution.
The one-off effects called a temporary halt to the improvement in the public finances, with net borrowing of £3 billion for the month ahead of the £2.7 billion seen a year earlier.
The Office for National Statistics said it was still one of the lowest borrowing outturns for December in 18 years. Capital Economics said unless previous figures were revised, borrowing targets were in danger: “If public borrowing sustains this reduction for the rest of the fiscal year, net borrowing would come in at £30.7 billion in 2018/19, a fair bit higher than the Office for Budget Responsibility’s forecast of £25.5 billion.”
Borrowing for the nine months of the financial year stands at £35.9 billion, £13.1 billion below 2017 and the lowest year-to-date figure since 2002.
Stripping out the EU effect, receipts are growing at 4.3% a year, while Government spending is increasing at a slower 3.5% partly thanks to lower inflation reducing the interest payments on its debt pile.
