Government borrowing today rose more than expected after December’s highest figure since monthly records began in 1993.
The cost of energy support schemes and a jump in loan interest resulted in public sector borrowing of £27.4 billion, some £16.7 billion more than the same month in 2021 and more than the £17.75 billion the city expects.
In corporate updates, Associated British Foods said trading at Primark had been better than expected in the 16 weeks to 7 January, following a 15% sales increase in the UK from a year earlier.
Saga heads for 50% revenue growth as over-50s return to sea
saga. Holidays. The media and insurance group focused on over-50s said revenue is set to grow between 40% and 50%, helped by demand for cruises after the end of Covid restrictions.
The company said it expected 84% of its cruises to be completed in the second half of the 2022/23 financial year, taking its full-year load factor to 75%, up from 68% in line with guidance.
Travel insurance revenue was expected to increase by 200% with a 95% increase in policy sales. But it described the market for car insurance as “challenging”, as total policies in its insurance business were down 3% from the previous year. It also said there was “some pressure” on its underwriting business, but its retail broking unit was expected to meet forecasts.
Increase in borrowing cost of energy support
UK government borrowing jumped more than expected today due to a sharp increase in spending on energy support schemes and a rise in debt interest.
The £27.4 billion figure for December was the highest since monthly records began in 1993 and compared with the City’s forecast of £17.7 billion.
Loan interest payable was £17.3 billion last month, mainly due to the impact of rising inflation on index-linked gilts.
This period also included the ongoing impact of the Government’s Energy Price Guarantee and the third round of Energy Bill Support Scheme payments costing £1.9 billion.
Today’s figures mean the public sector borrowed £128.1bn in the financial year to December, £5.1bn more than in the same period last year.
Record Christmas for Primark, says the ABF
Primark owner ABF has hailed a record Christmas as cash-strapped shoppers turn to the budget fashion retailer to avoid cost pressures.
Primark’s sales climbed 15% in the 16 weeks since the start of January, reaching a record high in the week leading up to Christmas Day. The firm plans to open 17 more new stores during the year, the first in Slovakia and the first in Hungary.
Overall group revenue at ABF was up 20% to 6.7 billion pounds, but the firm warned that inflation, labor costs and a stronger dollar meant profits were down compared to last year.
ABF said in a statement: “We believe that our offer of great quality at affordable prices and an engaging store experience is proving increasingly attractive to both existing and new customers.
“While early trading in this new calendar year has been encouraging, macro-economic headwinds remain and could have an impact on consumer spending in the coming months.”
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