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 May 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:-

18-May-2016 4¼% Treasury Stock 2036 £1,500 Million
10-May-2016 0 1/8% Index-linked Treasury Gilt 2058 £756.1400 Million
05-May-2016 1½% Treasury Gilt 2026 £2,874.9840 Million
04-May-2016 1½% Treasury Gilt 2021 £3,162.4980 Million

When you add the cash raised:-

∑(£1,500 Million + £756.1400 Million + £2,874.9840 Million + £3,162.4980 Million) =  £8,293.622 Million

£8,293.622 Million = £8.293622 Billion

On another way of looking at it, is in the 31 days in May, HM Government borrowed:-

£267 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, 2026, 2036 and 2058. All long term borrowings, we are mortgaging our futures, but at least “We are in it together….”