UK public sector borrowing spiked to the second-highest October level since records began, numbers on Thursday showed.

According to the Office for National Statistics, public sector net borrowing amounted to £17.35 billion last month, increasing 7.6% on-month from £16.14 billion, and up 9.8% annually from £15.80 billion.

The ONS said it was ‘the second-highest October borrowing since monthly records began in January 1993’.

Net debt as a percentage of gross domestic product rose to 97.5% in October, from 97.1% in September, and 95.9% a year prior. It remains at ‘levels last seen in the early 1960s’.

‘Public sector net financial liabilities excluding public sector banks was provisionally estimated at 83.7% of GDP at the end of October 2024; this was 2.5 percentage points more than at the end of October 2023, but 13.8 percentage points lower than public sector net debt,’ the ONS said.

UK Chancellor Rachel Reeves last month selected the PSNFL measure as the benchmark for government debt, rather than the prior measure of underlying public sector net debt.

The shift to PSNFL gave her greater headroom to meet her debt reduction target, because it includes a wider mix of state assets and liabilities – notably including expected student loan repayments to offset some of the liability.

The reading follows last month’s budget. Chancellor Reeves used October’s financial statement to confirm an increase to employer national insurance contributions, changes to inheritance tax rules for farmers and a rise in the minimum wage.

Taxes were raised to a historic high, with £40 billion extra a year in revenue used to pour into schools, the NHS, transport and housing.

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