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Inflation sends UK debt interest payments higher - Perthshire Chamber of Commerce

Inflation sends UK debt interest payments higher

Rising inflation led to government interest payments hitting a record high for the month of January, figures show.

Interest payments hit £6.1bn last month, the highest amount for a January since records began in April 1997 and up from £4.5bn last year.

The payments are pegged to the Retail Prices Index (RPI) measure of inflation - which reached 7.8% in January.

January's interest payments were, however, below the all-time high of £9bn in June last year.

The Office for National Statistics (ONS) said government finances recorded a surplus of £2.9bn last month as the economy opened up from lockdowns and tax receipts improved.

The surplus compares with a £2.5bn deficit in January 2021 - when spending on coronavirus support measures was higher.

However, the latest figure is still a £7bn smaller surplus than in January 2020, before the pandemic.

UK finances are normally healthier in January as self-assessment income tax receipts come in. Revenues from self-assessed tax was £18.4bn last month, an increase of £2bn from a year earlier.

Borrowing from the end of March to January was £138.5bn - the second highest for the period since records began in 1993.

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