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UK reports surging govt borrowing, lower retail sales
Yang Jing
Traffic in the City of London, UK, October 17, 2022. /CFP
Traffic in the City of London, UK, October 17, 2022. /CFP

Traffic in the City of London, UK, October 17, 2022. /CFP

The UK's public sector net borrowing surged while retail sales continued to drop in September, official data showed Friday, fuelling concerns over the country's weak economy amid a political crisis.

As decades-high inflation sees interest on debt repayments balloon, government borrowing jumped to 20 billion pounds ($22 billion) in September, 2.2 billion pounds more than the same period last year.

The public borrowing figure exceeded analysts' consensus of 17.2 billion pounds, which was already far above the government's own prediction, AFP reported on Friday. 

It was the second-highest September borrowing since monthly records began in 1993, lower than the highest record in September 2020 at the height of COVID-19, according to data released by the Office for National Statistics (ONS).

Retail sales volumes tumbled 1.4 percent from August as consumers reined in their spending under rising prices, official data showed, worse than the 0.5 percent contraction forecast by a Reuters poll of economists.

UK reports surging govt borrowing, lower retail sales

In the three months to September 2022, sales volumes fell by 2 percent compared to the previous three months, continuing a downward trend seen since summer 2021, the ONS said in the press release.

"The weakness in retail sales and further overshoot of the ... [government] public borrowing forecast won't make the next prime minister's task any easier in navigating the economy through the cost of living crisis, cost of borrowing crisis, and the cost of credibility crisis," concluded Ruth Gregory, senior UK economist at Capital Economics, AFP reported. 

The data comes one day after Prime Minister Liz Truss resigned amid market turmoil triggered by her budget of tax cuts funded by debt.

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