Recent data suggests that the UK government's borrowing increased massively in the month of December. In fact, this has made a new 30 years record which highlights how severe the situation has become.
The UK government had to spend a lot in terms of energy support and to pay back its debt interest. According to experts, there is a close connection between rising inflation and debt interest.
The data from ONS reveals an increase in the net borrowing from the public sector to $33.97 billion. And just a year earlier, the same value was only around 10.7 billion.
As per a poll of economists, the market was expecting December's borrowing figure to be around 17.75 billion only.
If we take a closer look at the ONS data, the main reason for this increase in borrowing is due to the large spending in terms of support schemes. In addition, the government also had to pay more interest payments on its debt.
Overall, the numbers have revealed a worse-than-expected condition of the UK government and the UK economy. That's why many are now expecting a very tight budget in terms of public finances.
Some experts believe that we will only see the announcement of tax cuts when we get closer to the next elections in the UK.
And if we look at the issue of debt interest payments, it was close to 17.3 billion. A quick look at the history reveals this was the highest figure in several decades and reflects how badly inflation has affected the country.
However, let's forget that the student loan data is added to the OBR analysis but is yet to be added to the ONS data. That's why the ONS left comments that it will revalue its estimates once more credible data is available.