21 November 2025
If you are covering the latest public sector borrowing figures from the Office for National Statistics, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Ahead of next week’s crucial Budget statement, today’s borrowing stats compound the woes for Chancellor Rachel Reeves as she seeks to not only plug gaps in the public finances, but also find extra to rebuild her headroom for future shocks. The government borrowed £17.4bn in October, lower than last year but still the third highest on record for this month since records began in 1993. To date this financial year, borrowing has reached £9bn more than the same period last year, highlighting the extent at which the government has increased borrowing since coming to power last year.
“Markets and investors are craving some sort of fiscal responsibility from the UK government, but with next week expected to bring yet more tax rises and potential unintended consequences, one does begin to question how long this current approach can last. Without a shift in the fiscal rules again, the UK economy is bound between tax rises, spending cuts or a combination of the two. So far this government has preferred to use the lever of tax rises and found its backbenchers have jammed the spending cuts one. Economic growth is subsequently difficult to achieve and shows no sign of taking off again any time soon.
“Gilt yields have been climbing higher once again in recent weeks, and the UK still has a risk premium attached to it compared to peers. Ultimately, today’s borrowing figures suggest Reeves is running out of room, and potentially time, to kick start the economy and get it growing once again. While rate cuts will help, inflation remains sticky and as such the Bank of England may not act as aggressively as the government would like. The ball is in Reeves’ court, but her next move will prove crucial next week.”
