UK’s economy experienced a huge budget deficit in August. Britain’s government borrowed more than they had anticipated for the month led by high-interest rates on government bonds. Official data released by The Office for National Statistics showed the effects of the inflation rate and the extent to which it influenced these decisions.
According to data released on Wednesday public borrowing excluding banks was at 11.82 billion pounds ($13.44 billion). As a result of this announcement, the Great British Pound dropped touching $1.1349. This has been its lowest in several decades. A reuters poll also had expected a borrowing figure of 8.45 billion pounds.
Moreover, just the debt interest payable for the Month of August stood at 8.2 billion pounds. This increase in borrowing and borrowing costs has been one of the adverse effects of the rising inflation in Britain. However, according to the Finance minister, this borrowing was an action by the government to help sinking businesses and families.