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Public sector net borrowing - June 22

ended 21. July 2022

The Public Sector Net Borrowing data for June is just out. You can read it here. If you have any views on this, fire them across ASAP. Just a paragraph or two will do. Key points below, too.

  • Public sector net borrowing excluding public sector banks (PSNB ex) was £22.9 billion in June 2022, which is the second-highest June borrowing since monthly records began in 1993; this was £4.1 billion more than in June 2021.
  • Central government current (or day-to-day) expenditure increased by £9.0 billion to £86.0 billion, largely because of a £10.3 billion increase in the interest payable on its debt compared with June 2021.
  • Central government debt interest payable was £19.4 billion in June 2022, which is the highest since monthly records began in April 1997; this is largely because of the effect of Retail Price Index (RPI) rises on index-linked gilts.
  • Central government receipts were £70.5 billion in June 2022, which is £7.9 billion more than in June 2021; of this, tax receipts were £51.4 billion, which is an increase of £5.1 billion compared with June 2021.
  • PSNB ex was £55.4 billion in the financial year to June 2022; this was £5.7 billion less than in the same period last year but £32.1 billion more than in the financial year to June 2019.
  • Since our last publication, we have reduced our estimate of PSNB ex in the financial year ending (FYE) March 2022 by £1.9 billion to £141.8 billion.
  • Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £12.3 billion in June 2022, which is £7.0 billion less than in June 2021; this brought the total to £26.2 billion in the financial year to June 2022.
  • Public sector net debt excluding public sector banks (PSND ex) was £2,387.6 billion at the end of June 2022, or around 96.1% of gross domestic product (GDP), which is an increase of £183.0 billion or 1.0 percentage points of GDP compared with June 2021.
  • Public sector net debt excluding public sector banks and the Bank of England (PSND ex BoE) was £2,068.4 billion at the end of June 2022, or around 83.2% of GDP, which is an increase of £92.0 billion but a reduction of 2.1 percentage points of GDP compared with June 2021.

3 responses from the Newspage community

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Editor
Sam Alsop-Hall
Chief Strategy Officer at Clive Henry Group
An increase in Public Sector net debt/borrowing is to be expected given the impact of the pandemic, but this latest data is still a concerning escalation, especially given the obvious need for further investment in public services. The age old debate about the role of the state and how much should be provided by the public sector is at a real inflexion point, but it is clear that some services such as the NHS need massive overhaul and investment and so now is the time for government to embrace and increase borrowing to bring public services up to an acceptable standard rather than looking to pull back. The government should be more radical and look to Roosevelt’s “New Deal” post the 1929 Great Depression for inspiration: public sector spending as a route to reinvigorate and stimulate the economy during a recession.
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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
An increase to inflation has driven June’s net borrowing to the second highest on record. This shows what a vulnerable position the government are in due to their debt levels. The good news is that debt as a percentage to GDP has decreased. However, this hides the massive amount of debt the Bank of England holds because of its ‘printing money’ policy, as these figures are excluded from this data. I would expect net borrowing to increase significantly over the next nine months as inflation heads higher but GDP is expected to stagnate.
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Marcus Wright
Managing Director at Bolton Business Finance
The latest government borrowing stats are pretty worrying. If the Government was a business, they would be about to go bust. We are borrowing at 83.2% of GDP and the interest payments being met by borrowing more money. This is exactly what Rishi Sunak is warning everyone about. Tax cuts would be ludicrous against this backdrop.