Government borrowing hits £18.3bn in August, £3.5bn above the OBR forecast

Public sector borrowing hit £18.3bn in August, £3.5bn above the OBR forecast and 19% up on a year earlier, leaving the financial year to date £8.1bn above profile at £77.3bn. Overshoots like this feed into gilt yields and the swap rates lenders use to price fixed mortgages, and they widen the range of tax measures in play at the autumn Budget. For buyers, September's upward drift in fixed rates looks less likely to reverse quickly; for sellers, it favours testing the market before the Budget rather than after it. It is one provisional month, though, and debt eased to 93.8% of GDP, 1.3 percentage points below a year earlier.