Another month, guess what, take a lucky guess, it is the same old story, HM Government, spends more money than it receives via taxes and duties. Another deficit month, thus to bridge the gap, needs to borrow on the bond market.
In December 2014, the HM Government had to borrow money to meet the difference between tax revenues and public sector expenditure. The term for this is The PSNCR: The Public Sector Net Cash Requirement.
There were “only” 3 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-
11-Dec-2014 0¾% Index-linked Treasury Gilt 2034 £812.370 million
09-Dec-2014 3½% Treasury Gilt 2045 £1,924.985 million
02-Dec-2014 2% Treasury Gilt 2020 £3,750.000 million
When you add the cash raised:-
∑(£812.370 million + £1,924.985 million + £3,750.000 million) = £6,487.36 Million
£6,487.36 Million = £6.487 Billion
On another way of looking at it, is in the 31 days in December, HM Government borrowed:-
£209 million each day for the 31 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts (Lend money to the UK), the budget deficit keeps rising. What is also alarming, is the dates these bond mature 2020, 2034 and 2045. All long term borrowings, we are mortgaging our futures, but at least “we are in it together…..”