UK government borrows more than expected as debt pile grows
The UK borrowed more than expected in June and the figures for May were also revised higher.
According to the latest figures on the public finances, the UK budget deficit totalled £14.5bn in June.
That was far bigger than the mean analyst estimate of £11.2bn. The Office for National Statistics also revised its borrowing figures for May higher by £1.8bn.
According to the latest numbers, the government had borrowed £49.8bn at the end of June, £1.1bn less than in the same period last year, but £3.2bn higher than the £46.6bn originally projected by the Office for Budget Responsibility.
The interest payable on central government debt was £7.4bn in June 2024, £5.5bn less than in June 2023, largely because the interest payable on index-linked gilts had fallen in line with inflation.
Public sector net debt excluding public sector banks was provisionally estimated at 99.5 per cent of gross domestic product (GDP) at the end of June 2024. This was 2.8 percentage points more than at the end of June 2023, and remains at levels last seen in the early 1960s.
Chief secretary to the Treasury Darren Jones said: “Today’s figures are a clear reminder that this government has inherited the worst economic circumstances since the Second World War, but we’re wasting no time to fix it.
“Fixing the economy’s foundations and restoring stability is the only way we can create growth and put more money back into people’s pockets across the country. That’s why we’ve introduced our Budget Responsibility Bill, which will ensure that no future Government can play fast and loose with the public finances.”
Dennis Tatarkov, senior economist at KPMG UK said: “The new Chancellor faces the daunting task of funding the new government’s agenda, while maintaining public finances on a sustainable footing.
“A combination of high levels of spending and weak growth prospects will present uncomfortable choices – deciding between even more borrowing or substantially raising taxes if spending levels are to be maintained.”
Tatarkov added: “Stronger departmental spend in June 2024 pushed borrowing ahead of expectations.”