UK: Borrowing Hits Four-Year High as Reeves Attends World Economic Forum

story

JAN 22

Above: Rachel Reeves, UK chancellor of the exchequer, at Bloomberg House during the World Economic Forum (WEF) in Davos, Switzerland, on Jan. 22, 2025. Image copyright: Chris Ratcliffe/Contributor/Bloomberg via Getty Imagesstory last updated JAN 23

The Facts

UK government borrowing reached £17.8B in Dec. 2024, marking the highest December figure in four years and exceeding expectations by £3.2B compared to forecasts.
The increased borrowing was driven by higher spending on public services, benefits, and debt interest payments, while tax receipts were impacted by previous National Insurance cuts, with debt interest costs reaching £8.3B in December.
Total government borrowing for the financial year to Dec. 2024 reached £129.9B, which was £8.9B higher than the same period last year and £4.1B above official forecasts.

The Spin

Left narrative

Reeves's plan remains sound despite criticism. Borrowing more to invest in infrastructure is crucial for boosting productivity and long-term growth, even with higher costs. Reeves is playing a long game, focusing on addressing deep-rooted structural issues rather than seeking short-term fixes. Her strategy is right — public investment, especially in green technology and affordable housing, is essential for creating sustainable economic prosperity.

Guardian Vox Political

Right narrative

Reeves's trip to Davos during a time of economic trouble is but another example of poor decision-making. With the economy faltering and borrowing soaring, her focus should be on addressing domestic issues rather than once again fleeing the country when times are tough. Meeting behind closed doors won’t help solve the UK's pressing challenges — her tax increases on businesses have damaged business confidence, and there's still no clear plan for growth.

Spectator (UK)Daily Mail