{"id":1575598,"date":"2025-09-19T12:40:00","date_gmt":"2025-09-19T16:40:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1575598"},"modified":"2025-09-19T12:40:00","modified_gmt":"2025-09-19T16:40:00","slug":"lost-control-surprise-uk-budget-deficit-blowout-batters-sterling-gilts","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/lost-control-surprise-uk-budget-deficit-blowout-batters-sterling-gilts\/1575598\/","title":{"rendered":"“Lost Control” – Surprise UK Budget Deficit Blowout Batters Sterling & Gilts"},"content":{"rendered":"

“Lost Control” – Surprise UK Budget Deficit Blowout Batters Sterling & Gilts<\/span><\/p>\n

\n

The fiscal farce in the UK went from bad to worse this morning as\u00a0government borrowing came in significantly higher than forecast in August.<\/p>\n

In yet another blow to Chancellor of the Exchequer Rachel Reeves – ahead of a challenging budget in the fall (autumn) – the deficit stood at \u00a318 billion<\/strong> ($24.4 billion), the Office for National Statistics said Friday, well above the \u00a312.5 billion the Office for Budget Responsibility had forecast<\/strong> and the highest borrowing for the month in five years…<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/p>\n

As Bloomberg reports, this\u00a0left the deficit after five months of the fiscal year at \u00a383.8 billion – \u00a311.4 billion above the OBR forecast and the second-highest since records began in 1993 after the pandemic in 2020. <\/strong>The deficit was \u00a367.6 billion a year earlier.<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/p>\n

The disappointing August figures were compounded by a series of revisions to the previous four months<\/strong> that added \u00a35.9 billion to the deficit, much of it due to lower-than-previously-estimated VAT receipts and higher local-government spending and borrowing.<\/p>\n

Reeves had looked on track this year<\/strong> with stronger tax receipts offsetting higher spending but the latest figures are a significant setback, underscoring the perilous state of the public finances and potentially further eroding the slim \u00a39.9 billion headroom set aside against her main fiscal rule.\u00a0<\/p>\n

The pound and gilts fell.<\/strong><\/p>\n

The yield on 10-year bonds rose two basis points to 4.70%, while the 30-year rate rose three basis points to 5.54%.<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/p>\n

Sterling dropped as much as 0.5% to $1.3483, the lowest since Sept. 8.<\/p>\n

<\/a><\/p>\n

Source: Bloomberg<\/p>\n

\u201cThe chancellor has lost control of the public finances,\u201d <\/strong><\/em>Mel Stride, the opposition Conservative shadow chancellor, said.<\/p>\n

Reeves already faced a difficult budget on Nov. 26, when she is expected to announce billions of pounds of growth-sapping tax rises to offset higher borrowing costs, policy u-turns and an anticipated growth downgrade by the OBR.<\/p>\n

James Murray, Chief Secretary to the Treasury, said the government \u201chas a plan<\/strong> to bring down borrowing because taxpayer money should be spent on the country\u2019s priorities, not on debt interest.\u201d<\/em><\/p>\n

Bloomberg Economics reckons \u00a335 billion is needed to plug the borrowing gap<\/strong> that has opened up since the March Spring Statement.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 09\/19\/2025 – 08:40<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/economics\/lost-control-surprise-uk-budget-deficit-blowout-batters-sterling-gilts<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

“Lost Control” – Surprise UK Budget Deficit Blowout Batters Sterling & Gilts The fiscal farce in the UK went from bad to worse this morning…<\/p>\n","protected":false},"author":0,"featured_media":1575599,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1575598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1575598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1575598"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1575598\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1575599"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1575598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1575598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1575598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}