RSM analyst Thomas Pugh said August public net borrowing rose sharply YoY,
complicating the upcoming budget and making an October tax increase likely.
Fiscal-year-to-date net borrowing is £77.3 bln, well above the Office for Budget
Responsibility’s £69.2 bln forecast. With inflation rising and the budget likely
to include additional spending commitments, borrowing is expected to continue
materially outpacing forecasts. Investors are watching each borrowing print for
signs of the government’s fiscal discipline amid elevated gilt yields.
