RT @resfoundation: What's going on with the public finances? Cara explains ⤵️

And more importantly, if we compare borrowing for this month against the OBR’s most recent forecast, it’s £3.2bn higher – with borrowing now running £4.1bn higher than the OBR forecast over the first three quarters of the fiscal year (Apr-Dec).

Public sector borrowing was £17.8bn in December – over £10bn higher than this time last year, and the highest December borrowing in four years (in nominal terms) - and 3rd highest on record after the depths of the financial crisis in 2009 and the pandemic in 2020.

But back to today’s data…

(As an aside: bond yields have receded significantly in recent days – with long-term gilt rates now much closer to where the OBR expected them to be. So ‘keep calm and carry on’ should be the Chancellor’s approach for now!)

Plus, the December data in this release pre-dates much of the recent interest rate spike.

Big caveat: Today’s data don’t tell us anything about the effect of gilt market movements on the Chancellor’s fiscal headroom – changes in gilt yields will take a long time to bleed into debt interest payments.