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 August 2015, 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 :-
20-Aug-2015 4¼% Treasury Stock 2036 £1,644.0950 Million
11-Aug-2015 0 1/8% Index-linked Treasury Gilt 2058 £681.9000 Million
04-Aug-2015 2% Treasury Gilt 2025 £3,000.0000 Million
When you add the cash raised:-
∑(£1,644.0950 Million + £681.9000 Million + £3,000.0000 Million) = £5,326.00
£5,326.00 Million = £5.326 Billion
On another way of looking at it, is in the 31 days in August, HM Government borrowed:-
£171 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 2025, 2036 & 2058. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…”