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 December 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:-
14-Dec-2016 0 1/8% Index-linked Treasury Gilt 2036 £800.0000 Million
07-Dec-2016 1½% Treasury Gilt 2047 £2,250.0000 Million
06-Dec-2016 1½% Treasury Gilt 2026 £2,668.5700 Million
01-Dec-2016 0½% Treasury Gilt 2022 £3,122.8290 Million
When you add the cash raised:-
∑(£800.0000 Million + £2,250.0000 Million + £2,668.5700 Million + £3,122.8290 Million = £8,841.399 Million
£8,841.399 Million = £8.841399 Billion
On another way of looking at it, is in the 31 days in December, HM Government borrowed:-
£285million 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, 2026, 2036 and 2047. All long term borrowings, we are mortgaging our futures, but at least “We are in it together…”