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 October 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” 4 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-
27-Oct-2015 2% Treasury Gilt 2025 £3,299.9700 Million
15-Oct-2015 0 1/8% Index-linked Treasury Gilt 2026 £1,500.0000 Million
06-Oct-2015 4½% Treasury Gilt 2034 £1,500.0000
01-Oct-2015 1½% Treasury Gilt 2021 £4,397.6500
When you add the cash raised:-
∑(£3,299.9700 Million + £1,500.0000 Million + £1,500.0000 Million + £4,397.6500) = 10,697.62 Million
£10,697.62 Million = £10.697 Billion
On another way of looking at it, is in the 30 days in September, HM Government borrowed:-
£345 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 2021, 2025, 2026 and 2034. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together…”