HM Government Borrowings: June 2018

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 June 2018 , 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:-

26-Jun-2018 1¾% Treasury Gilt 2037 £2,587.4950 Million
20-Jun-2018 0 1/8% Index-linked Treasury Gilt 2028 3 months £1,381.4000 Million
06-Jun-2018 0¾%  Treasury Gilt 2023 £2,750.0000 Million

When you add the cash raised:-

(2,587.4950 Million + £1,381.4000 Million + £2,750.0000 Million) =  £6718.895 Million

£6718.895 Million = £6.718895 Billion

On another way of looking at it, is in the 30 days in June, 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 2023, 2028 and 2037. All long term borrowings, we are mortgaging our futures, but at least “We Are In It Together….”

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