Wed, 22 Jan 2025

Reeves optimistic despite surprise rise in UK borrowing

Borrowing - the difference between spending and tax revenue - hit its highest December level for four years.

* Borrowing rose by £17.8bn in December, a four-year high
* Public spending and debt interest increased on the year
* Tax receipts were offset by National Insurance cuts made by previous government
* Chancellor Rachel Reeves says she is "optimistic" about the economy despite pressure on finances
* Government's top priority is economic growth to improve living standards
* Plans for expansions at Heathrow and Gatwick Airports are being considered
* Treasury is looking at supporting a third runway at Heathrow and approving a second runway at Gatwick
* Interest charged on government debt hit £8.3bn, the third-highest December repayments since records began in 1997
* Borrowing was £3.2bn more than forecast by the Office for Budget Responsibility
* Chancellor Reeves says she will not be "coming back with more borrowing or more taxes" after her first Budget in October
* Economists warn that weak economic growth and high interest rates could lead to tax rises and/or spending cuts
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