- Government borrowing fell to £11.2 billion, the lowest for three years
- The tax take increased by £3.8 billion but was partially offset by the cut to National Insurance contributions
- Debt interest fell to £3 billion – £4.7 billion less than in November 2023
Danni Hewson, AJ Bell head of financial analysis, comments on the latest public sector finances:
“As early Christmas gifts go, this one will be roundly welcomed by everyone at Number 11. The amount of cash coming in has increased substantially, even when you factor in the cut to National Insurance implemented by Rachel Reeves’ predecessor.
“The cost of servicing that debt mountain, piled higher during the pandemic, has fallen considerably as inflation cooled. All of that has helped to bring down the amount the government needed to borrow to £11.2 billion, the lowest required for November in three years and significantly below what analysts had been expecting.
“But the hard truth is the government is still spending substantially more than it’s got coming in and though borrowing to fund day-to-day spending was £3.5 billion less than the same time last year, it was still a hefty £6.8 billion.
“Pay rises, increases to benefits and the overall impact of stubborn inflation have added to the demands on the public purse and the stark reality is that the chancellor did have tough choices to make if she wanted to even start to balance the books. Whether those choices were the right ones will continue to be debated but, as ever, finding the key to unlocking growth is the best option for an ailing economy.
“So far, the main focus has been on those unpleasant tax hikes which are already impacting businesses up and down the country and had to be factored in when the Bank of England made its latest decision on interest rates. But there was more in the Budget than just tax rises and additional spend on public services, and changes to the planning system will take longer to bed in.”
