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 October 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 :-

21-Oct-2014 2¾% Treasury Gilt 2024  £3,000.000 million
16-Oct-2014 0 1/8% Index-linked Treasury Gilt 2024  £1,400.000 million
07-Oct-2014 3½% Treasury Gilt 2045  £2,473.537 million
01-Oct-2014 2% Treasury Gilt 2020  £4,399.890 million

When you add the cash raised:-

∑(£3,000.000 million + £1,400.000 million + £2,473.537 million +£4,399.890 million ) = £11,273.43 million

£11,273.43 million = £11.273 Billion

On another way of looking at it, is in the 30 days in October, HM Government borrowed:-

£375 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 2024, 2045 and 2020. All long term borrowings, we are mortgaging our futures, but at least “we are in it together….”