Total UK government debt hits £3tn for first time while inflation jumps to highest in nearly a year - business live
UK government debt has reached £3 trillion for the first time as inflation and interest payments on debt rise. The Treasury faces significant fiscal pressure ahead of the upcoming budget, exacerbated by energy costs linked to the ongoing Iran war.
Why it matters
The UK's fiscal health is under strain, limiting the government's ability to provide financial support for energy bills and other public services.
The UK’s fiscal position is also not exactly rosy, as the latest public finance figures show.
The Treasury ran a higher than expected budget deficit of £24.5bn last month as rising inflation pushed up the interest paid on government debt, increasing pressure on John Healey before his budget next week.
Official figures show the government paid £10.9bn in debt interest : the highest September figure since records began, and only the eighth time the monthly number has been above £10bn.
Some government bonds are directly linked to the retail prices index measure of inflation, with payments rising in line with it. RPI has increased in recent months as the Iran war has pushed up energy costs. The Office for National Statistics said this had added £4bn to debt interest costs in September alone.
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