HM Government December 2013 Borrowings…

Another month, and guess what, take a wild guess, it is the same old story, HM Government, spends more money than it receives via taxes. Another deficit month, thus to bridge the gap, needs to borrow on the bond market.

In December 2013, 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” 2 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-

12-Dec-2013 1¾% Treasury Gilt 2019  £4,552.3520 million

10-Dec-2013 0¾% Index-linked Treasury Gilt 2047  £1,000.0000 million

When you add the cash raised:-

∑(£4,552.3520 million + £1,000.0000 million) = £5,552.350 million = £5.552 Billion

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

£179 million each day for 31 days. We are fortunate, while the global banking and financial markets still has the confidence in HM Government to buy the Gilts. The budget deficit keeps rising. What is also alarming, is the dates these bond mature, 2049. All long term borrowings, we are mortgaging our futures.

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