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 September 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” 4 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office (http://www.dmo.gov.uk/) to raise cash for HM Treasury:-
20-Sep-2016 1½% Treasury Gilt 2047 £2,874.9990 Million
14-Sep-2016 0 1/8% Index-linked Treasury Gilt 2046 £800.0000 Million
06-Sep-2016 1½% Treasury Gilt 2026 £2,874.9970 Million
01-Sep-2016 0½% Treasury Gilt 2022 £3,150.8860 Million
When you add the cash raised:-
∑(£2,874.9990 Million + £800.0000 Million + £2,874.9970 Million + £3,150.8860 Million = 9700.882 Million
9700.882 Million = £9.700882 Billion
On another way of looking at it, is in the 30 days in September, HM Government borrowed:-
£223 million each day for the 30 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, 2026, 2046 and 2047. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…”