The figure halved from December 2022 and was significantly lower than the £14bn forecast by the Office for Budget Responsibility, marking the lowest December borrowing since 2019.

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Central government debt interest payable was £4bn last month, down £14.1bn from a year prior, and the lowest figure since December 2020, the ONS noted.

The agency explained the drastic drop was largely affected by Retail Prices Index movements on index-linked gilts.

However, borrowing for the financial year to December 2023 was £119.1bn, up £11.1bn on the nine-month period in 2022 and the fourth highest financial year to December on record, the ONS found. Despite this, the figure was still £5bn lower than the £124.1bn forecast by the OBR.

Public sector net debt stood at £2.7trn at the end of December, provisionally estimated at around 97.7% of UK GDP – 1.9 percentage points higher than in the same period in 2022, and the highest level since the 1960s.

Excluding the Bank of England, debt stood at £2.4trn – around 88.7% of GDP – £247.7bn lower than the wider measure, the ONS explained.

Public sector net worth was in deficit by £715.4bn for the month of December, compared with £593.7bn at the end of December 2022, yet government net cash came in £4.5bn lower than a year prior at £18.7bn for the month.

The ONS also revised the borrowing figures downwards for the financial year to March 2023 by £9.1bn. This means that in the last financial year the UK Government borrowed £130.1bn, £5.6bn higher than the previous financial year, marking 2022-23 as the fourth highest year for borrowing since records began in 1947.

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Chief secretary to the Treasury Laura Trott said today’s (23 January) figures showed “debt is on track to fall as a share of the economy”, after the economic challenges of the last few years, including the energy crisis of 2022 and a “once-in-a-century pandemic”.

She added: “It is right that we pay back these debts so future generations are not left to pick up the tab. Because of this government’s decisive action, the economy is now beginning to turn a corner: Inflation has more than halved. Debt is on track to fall as a share of the economy. And we have been able to afford tax cuts for 27 million working people, and an £11bn tax cut to drive business investment.”