Borrowing at third highest on record for September

The Treasury has said it will need to take difficult decisions in next week's budget after higher debt interest payments and pay awards for public sector workers pushed government borrowing to £16.6bn last monththe third highest September figure on record.

- Larry Elliott

In the last update on the state of the public finances before Rachel Reeves announces her tax and spending plans next week, the Office for National Statistics (ONS) said the UK's budget deficit was £2.1bn higher last month than in the same month a year earlier. The City had been braced for a slightly higher deficit of £17.5bn, but the ONS said that only in the two Septembers affected by the pandemic in 2020 and 2021 had the government needed to borrow more.