Credit to government declines for third consecutive month, falls to N32.7 trillion in August
Credit to the government declined for the third consecutive month, falling to N32.7 trillion in August 2026. The post Credit to government declines for third consecutive month, falls to N32.7 trillion in August appeared first on Nairametrics .
The UK government's borrowing in August exceeded expectations, reaching £18.3bn, according to recent financial reports. This marks a significant increase compared to forecasts, as the cost of servicing the national debt climbed to an all-time high for the month. Inflation is a major factor behind this surge, causing interest payments on government debt to rise.
Central government debt interest bill for August amounted to £8.8bn, the highest recorded since 1997 when monthly records began. This increased borrowing costs put additional strain on government revenues, leaving less fiscal flexibility and making the public finances more vulnerable to future economic shocks. While a near-term improvement in borrowing figures would be beneficial, it alone would not alleviate the pressures caused by higher borrowing costs.
Recent 30-year gilt yields hit their highest level since 1998, indicating a rise in the cost of long-term financing. Although these higher yields do not immediately affect debt interest costs, they make it more challenging for any positive borrowing data to create lasting fiscal room. For the upcoming Budget, the government will need not only better borrowing data but also some easing in borrowing costs to address these concerns.
Written by urgent.news from Guardian Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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