Brits are facing a miserable winter amid a barrage of bleak economic news - just a week before the Budget.
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Brits → face → Budget
Official figures showed the UK's debt mountain has hit the grim milestone of £3trillion, after public sector borrowing came in higher than expected again last month at £24.5billion.
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borrowing → show → 24.5billion
Meanwhile, the fallout from the Middle East crisis saw inflation surge above predictions to reach 3.5 per cent in the year to September.
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inflation → see → September
Analysts said the price pressure is likely to guarantee that the Bank of England will increase interest rates next month, heaping pain on mortgage-payers.
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Bank → say → payers
Some are now anticipating another rise in December.
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Some → anticipate → December
The dire backdrop was underlined as Chancellor John Healey prepares to deliver his first fiscal package next Wednesday - with fears running high of another tax raid to balance the books.
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fears → underline → books
Official figures showed the UK's debt mountain has hit the grim milestone of £3trillion, after public sector borrowing came in higher than expected again last month at £24.5billion
Borrowing is running ahead of the OBR's forecasts for the year so far
The dire backdrop was underlined as Chancellor John Healey prepares to deliver his first fiscal package next Wednesday
Mr Healey moved to rule out pushing up capital gains tax yesterday, in a bid to cool nerves on markets.
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Healey → show → markets
However, speculation is mounting that he will opt to hit banks as he tries to find cash for Andy Burnham's policy pledges.
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he → mount → pledges
Economists have suggested that Mr Healey could be helped by a windfall from higher inflation, which will drag people deeper into the tax system due to thresholds being frozen until 2031.
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which → suggest → 2031
While that would help offset high debt interest costs, it will also leave families worse off and put intense strain on public services unless departmental funding also rises.
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funding → help → services
The batch of economic figures were released at 7am, just as the Government announced its long-awaited decision to approve the Jackdaw gas field scheme in the North Sea.
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Government → release → Sea
The Office for National Statistics (ONS) reported that public sector net borrowing increased by £1.8billion compared with the same month last year.
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borrowing → report → month
It was also £1.9billion ahead of Office for Budget Responsibility (OBR) forecasts, and above the £24.1billion widely predicted by economists.
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It → predict → economists
The UK Government spent £24.5billion more than it brought in through taxes and other measures during the month.
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it → spend → month
Total Government spending rose by 5.6 per cent to £111.3billion in September, compared with a year earlier.
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spending → rise → September
The rise came on the back of higher debt interest payments, linked to the increase in global borrowing costs largely linked to the conflict in the Middle East.
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rise → come → East
Central government debt interest costs were £10.9billion for September, up £1.6 billion against the same month last year, and marking the largest September figure on record.
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costs → mark → record
Meanwhile, net spending on social benefits rose by £1.6billion to £30.6 billion for the month.
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spending → rise → month
The data also showed that public sector net debt surpassed £3trillion for the first time, up £91.7billion compared with a year earlier.
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debt → show → time
However, debt as a proportion to GDP decreased by 0.7 percentage points to 94 per cent.
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debt → decrease → cent
ONS chief economist Grant Fitzner said: 'Borrowing in the first six months of the current financial year remained below the same period last year, thanks to higher receipts, although it was still above the official forecast.
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it → say → forecast
Preliminary figures suggest that although debt in cash terms continues to rise, as a proportion of GDP it has fallen over the year.
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it → suggest → year
On this latter basis it remains at levels last seen in the early 1960s.
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it → remain → 1960s
It came as separate data from the ONS showed that UK inflation lifted to an 11-month-high of 3.5 per cent last month, partly driven by rising fuel costs linked to the Iran war.
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inflation → come → war
The UK Government spent £24.5billion more than it brought in through taxes and other measures during September
Shadow chancellor Andrew Griffith said: 'Government borrowing of more than £3trillion – the highest in history – and rising inflation show Labour has lost control of the economy.
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Labour → spend → economy
Next week's Budget needs to take urgent action to tackle the deficit, and reduce the red tape and net zero costs that are driving up the cost of living for families.
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that → need → families
We will cut the welfare bill and cut wasteful spending so we can cut taxes and make our country prosperous again.'
Nigel Green, chief executive of financial advisory firm deVere Group, said: 'I'd now expect a hike in November and another in December.
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I → cut → December
Inflation's heading the wrong way, it's spreading into services, and the Bank knows it was too slow last time.
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it → head → services
'Having raised rates twice, it's hardly going to turn around and cut them a few months later.
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it → raise → them
Unless the economy weakens badly, cuts next spring look very unlikely to me.'
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cuts → weaken → me
Greg Thwaites, interim chief economist at the Resolution Foundation, said: 'Rising inflation and record levels of debt illustrate the double dilemma facing the Chancellor – how to ease cost of living pressures for families while keeping a lid on Government borrowing.
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inflation → say → borrowing
'Borrowing is already off track this year, debt has hit £3trillion, and markets are closely scrutinising government's ability to keep on top of the public finances.
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markets → hit → finances
The Chancellor must confront this double dilemma head on in his Budget next week rather than duck reality.'
Matt Swannell, chief economic adviser to the Item Club, said: 'The public finances remain in a fragile position, and next week's Budget looks set to be a relatively low-key affair.
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Budget → confront → position
Higher gilt yields have dented the Chancellor's fiscal headroom, likely leaving between £10 billion and £15 billion of margin for error against his primary fiscal rule.
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yields → dent → rule
The Aporia
