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 July 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” 4 auctions of Gilts (UK Government Bonds) by the UK Debt Management Office (http://www.dmo.gov.uk/) to raise cash for HM Treasury :-

22-Jul-2014 2¾% Treasury Gilt 2024  £3,567.2500 million
17-Jul-2014 1/8% Index-linked Treasury Gilt 2024  £1,628.4850 million
08-Jul-2014 4% Treasury Gilt 2060  £1,924.9850 million
01-Jul-2014 1¾% Treasury Gilt 2019  £4,000.0000 million

When you add the cash raised:-

∑(£3,567.2500 million  + £1,628.4850 million + £1,924.9850 million + £4,000.0000 million) =

£11,120.72 million

£11,120.72 million = £11.120 Billion

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

£358 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 2019, 2024 and 2060. All long term borrowings, we are mortgaging our futures, but at least “we are in it together…..”