Lower borrowing windfall ‘could be used to tackle energy costs’

The UK government borrowed £16.8 billion last month, the fourth highest December figure since 1993, but less than expected and £7.6 billion down on December 2020, according to the Office for National Statistics (ONS).

Public sector net borrowing (excluding banks) for the financial year to December 2021 was £146.8 billion, while tax receipts rose by £6.2 billion year on year. Central government spending dropped by £1 billion from December 2020 to £84.7 billion, reflecting the end of the furlough schemes.

The drop in borrowing could allow the government to tackle skyrocketing energy bills, the Resolution Foundation believes.

James Smith, research director at the think tank, explained: “Borrowing for the first nine months of the financial year is now £13 billion lower than the Office for Budget Responsibility’s October forecast, mainly reflecting the stronger-than-expected post-furlough scheme labour market. This fiscal room for manoeuvre makes it inevitable that the chancellor will set out a plan to deal with the cost of living crunch.

“With soaring energy bills set to push over six million families into fuel stress, a targeted package to limit the rise in energy bills is the top priority.”

https://www.ons.gov.uk/releases/publicsectorfinancesukdecember2021

https://www.resolutionfoundation.org/press-releases/lower-borrowing-may-give-chancellor-the-fiscal-ammunition-to-tackle-soaring-energy-bills