The report stated: “The UK has the second lowest gross debt as a proportion of GDP in the G7, although debt is currently high by historical standards as a result of a series of significant crises.
"From the start of the financial year to the end of August, public sector net borrowing reached £58.2bn."
This is £21.4bn lower than the same point last year but broadly in line with the OBR's March forecast to date. Higher government spending has largely been offset by lower borrowing in other parts of the public sector.
Garry White, chief investment commentator at Charles Stanley, said markets were taking quite a pessimistic view of the government’s plans.
He said: “Global investors failed to be impressed by Kwarteng’s 'great growth gamble'. British shares fell, UK gilt yields surged to almost 4 per cent, and the pound hit a 37-year low against the dollar.
"Chancellor Kwarteng’s announced a series of tax cuts – the largest since 1972 – while also boosting spending, measures that will turbocharge the country’s national debt.
"Gilt yields surged as the UK Debt Management Office laid out plans for additional issuance to fund this planned spending."
He said a rise in the pound would have meant that the UK’s growth outlook would have materially improved.
White added: "Investors believe that tax cuts and increased public spending could make the UK's economic situation even worse – and see this gamble as risky.
"Simply putting money into the economy does not result in sustainable long-term growth. We need more entrepreneurship and an upskilled workforce – moves that should help resolve Britain’s lacklustre productivity.”
david.thorpe@ft.com
