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 January 2014, 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 :-

23-Jan-2014 2¼% Treasury Gilt 2023  £3,574.738 million
16-Jan-2014 3¼% Treasury Gilt 2044  £2,199.070 million
07-Jan-2014 1/8% Index-linked Treasury Gilt 2029  £1,475.480

When you add the cash raised:-

∑(£3,574.738 million + 2,199.070 million + £1,475.480) = £7,249.290  Million

£7,249.290  Million = £7.249 Billion

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

£233 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, 2023, 2029 and 2044. All long term borrowings, we are mortgaging our futures.