The UK Government reported a £17 billion public sector deficit for October 2024, according to figures from the Office for National Statistics (ONS). This brings the cumulative shortfall for the first seven months of the financial year to £97bn, surpassing budget forecasts by £15bn and representing the third-highest October deficit since records began.
While tax receipts increased slightly, spending outpaced revenue, with net debt reaching £2,792bn – equivalent to 97.5% of GDP. Cuts in employee National Insurance contributions were offset by higher income tax and corporation tax receipts. However, a 4% rise in spending on public services and welfare contributed to the deficit.
The Autumn Budget identified a £22bn gap in public spending and anticipated £16bn in additional debt interest, leading to revised borrowing estimates of £127bn for the full financial year – £40bn above initial projections.
Chancellor Rachel Reeves has emphasised the need for tax increases to stabilise finances, with planned employer National Insurance hikes set to take effect in April 2025.
Alison Ring, Director of Public Sector and Taxation at ICAEW, said:
“Today’s numbers show that taxes and other receipts fell short of public spending by £97bn in the seven months to 31 October… emphasising the difficult financial situation the Government tried to address in last month’s Autumn Budget.”
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