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 May 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 :-

28-May-2014 0¼% Index-linked Treasury Gilt 2052  £1,209.97 Million
15-May-2014 4½% Treasury Gilt 2034  £2,181.56 Million
07-May-2014 0 1/8% Index-linked Treasury Gilt 2044  £1,272.96 Million

When you add the cash raised:-

∑(£1,209.97 million + £2,181.56 million + £1,272.96 million) = £4,664.49 Million

£4,664.49 Million = £4.664 Billion

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

£150 million each day  for 31 days of May. 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, 2052, 2034 and 2044. All long term borrowings, we are mortgaging our futures, but at least we are “in it together…”