PwC comments on the latest ONS Public Sector Finance data

Commenting on the latest ONS public sector finance data, Nabil Taleb, economist at PwC UK, says:

“Public sector net borrowing came in at £11.2bn in November 2024, around 30% lower than November last year and the lowest November borrowing since 2021. Net borrowing in the financial year to November 2024 also fell by £0.4bn to £113.2bn but remains the third highest financial year-to-November since records began.

"Debt interest payments in November 2024 are £3.0bn, down over 61% from November last year. Although movements in the Retail Price Index (RPI) over the past year are the cause of decreased debt servicing costs, we expect inflationary pressures to tick up slightly in 2025. This will challenge the Chancellor’s commitment to increase real-term departmental spending whilst avoiding austerity.

"As the Chancellor’s front-loaded departmental spending plans begin to materialise, attention will increasingly turn to the performance of key public services. The goal is to grow the economy, but this requires careful balancing with ongoing fiscal oversight. The new target measure of public debt - public sector net financial liabilities (PSNFL) - currently stands at 84.6% of GDP, offering a relatively flattering view of the fiscal landscape compared to the previous measure - public sector net debt excluding the Bank of England (PSND ex BoE) - which stands at 98.1%. The long term question facing the Government however still remains: will the increased borrowing and investment budget be sufficient to have a material impact or will the Chancellor need to borrow and spend more?"