Government borrowing for October higher than expected

UK government borrowing was higher than expected last month according to the latest official figures.

Borrowing - the difference between public spending and tax income - was £17.4bn in October, down from £19.2bn in the same month last year, the Office for National Statistics (ONS) said.

The borrowing figures come less than a week before Chancellor Rachel Reeves unveils her Budget, and she has previously confirmed both tax rises and spending cuts are on the table.

ONS chief economist Grant Fitzner said while borrowing was down compared with the same month last year, it was "the third-highest October figure on record in cash terms".

However, borrowing was £1.8bn lower than in October last year.

"While spending on public services and benefits were both up on October last year, this was more than offset by increased receipts from taxes and National Insurance contributions," he said.

Analysts had expected October borrowing to be £15bn, slightly higher than the Office for Budget Responsibility's (OBR) March forecast of £14.4bn.

In the financial year to October, borrowing was £116.8bn, which was £9bn more than the same seven-month period in 2024. It was the second-highest borrowing for April to October since records began in 1993, after 2020.

Separate data from the ONS showed that over the month of October retail sales fell by 1.1% - the first monthly drop since May.

"Supermarkets, clothing stores and online retailers all saw slower sales, with feedback from some retailers that consumers were waiting for November's Black Friday deals," Mr Fitzner said.

Ruth Gregory, deputy chief UK economist at Capital Economics, said that together the latest government borrowing and retail sales figures painted a "pretty grim picture" of the economy.

She noted the monthly fall in retail sales "isn't quite as bad as it looks" as it comes off the back of four consecutive months of increases, but also said that consumer confidence had declined, which "suggests that consumers aren't exactly chipper at the moment".