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 2016, 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:-
17-Aug-2016 4¼% Treasury Gilt 2055 £1,250 Million
11-Aug-2016 0 1/8% Index-linked Treasury Gilt 2036 £954.580 Million
02-Aug-2016 0½% Treasury Gilt 2022 £2,500 Million
When you add the cash raised:-
∑(£1,250 Million + £954.580 Million + £2,500 Million) = £4,704,580 Million
££4,704,580 Million = £4.704 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 2022, 2036 and 2055. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…”