Government borrowing increased to its second-highest level on record for October last month, driven in part by a string of public sector pay hikes.
Public sector borrowing climbed by £1.6 billion year on year to £17.4 billion as the budget deficit ticked up by £0.4 billion to £12.7 billion.
Both marked the second-highest figure for October since records began in 1993, according to the ONS, as higher tax receipts failed to offset an increase in spending.
“Pay rises and inflation increased running costs,” the statistical body added, after teachers and NHS staff were awarded backdated pay hikes from last month.
Debt interest payments also increased by £0.5 billion to £9.1 billion last month, marking the highest October figure since records began.
Central government spending went up by £2.5 billion to £36.9 billion as a result, the figures showed.
“Despite the changes announced at the Budget, fiscal policy will continue to tighten over the next few years,” EY ITEM Club analysts said.
“Moreover, the chancellor has left herself little wiggle room against her own fiscal rules and may need to implement more tax rises in future years if the tax take disappoints or spending proves higher.
“Indeed, if the rise in market interest rates since the Budget is sustained, the government would already have less headroom against its fiscal targets.”