UK borrowing down but fears of higher inflation rising

UK borrowing down but fears of higher inflation rising as the economy starts to come to the terms of the aftermath of the pandemic.

UK Government borrowing fell in September compared with a year earlier as the economy continued to recover from coronavirus lockdowns according to the Office for National Statistics.

The need to borrow was particularly high during 2020 as so many people were on furlough and businesses were in many cases suspended but even so, the figure is still the second-highest for September since monthly records began in 1993.

The amount borrowed stands at £21.8 billion which is around 25 per cent (£7 billion) less than in September 2020.

Although UK pensioners are due to receive a 3.2 per cent increase next April, the Bank of England (BOE) believes that inflation in the UK continues to head upwards.

Bank of England Governor has already warned that it will have to act on inflation when it next holds its interest rate-setting meeting on November 4 as at it appeared that inflation could hit 4 per cent.

However according to a BBC report, BOE new chief economist Huw Pil has indicated that he wouldn’t be surprised if inflation hit 5 per cent in the New Year.

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