HM Government October Borrowing

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 2017, 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:-

24-Oct-2017 0 5/8% Index-linked Treasury Gilt 2042 £650.0000  Million
19-Oct-2017 1¼% Treasury Gilt 2027 £2,599.2400 Million
10-Oct-2017 1¾% Treasury Gilt 2037 £2,500.0000 Million
05-Oct-2017 0¾% Treasury Gilt 2023 £3,162.5000 Million

When you add the cash raised:-

∑(£650.0000  Million + £2,599.2400  Million + £2,500.0000 Million + £3,162.5000 Million) =  £8911.74 Million

£8911.74 Million  = £8.91174 Billion

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

£287 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 2042, 2037, 2027 and 2023. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….

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