Rachel Reeves has been dealt another blow. (Image: Getty)
Government borrowing in the UK rose to a higher-than-expected ￡20.7 billion last month as debt interest payments soared in a massive blow to Chancellor Rachel Reeves, according to official figures. The Office for National Statistics (ONS) said June borrowing was ￡6.6 billion higher than a year earlier and the second highest June borrowing since records began, only behind that seen in 2020 at the height of the pandemic.
The ONS said interest payable on debt jumped to ￡16.4 billion due to a large rise in Retail Prices Index inflation impacting index-linked Government bonds. June borrowing was higher than the ￡17.6 billion expected by most economists. Borrowing for the first three months of the financial year to date stood at ￡57.8 billion, ￡7.5 billion more than the same three-month period in 2024.
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Darren Jones, Chief Secretary to the Treasury, said: “We are committed to tough fiscal rules, so we do not borrow for day-to-day spending and get debt down as a share of our economy.
“This commitment to economic stability means we can get on with investing in Britain’s renewal, including fixing our NHS, strengthening our national defence and building hundreds of thousands of affordable homes through our plan for change.”
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Responding to the higher-than-expected rise in Government borrowing, Shadow Chancellor Mel Stride said: “Rachel Reeves is spending money she doesn’t have. Debt interest already costs taxpayers ￡100 billion a year – almost double the defence budget – and it’s forecast to rise to ￡130 billion on Labour’s watch.
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“Labour’s jobs tax and reckless borrowing is killing growth and fuelling inflation – paving the way for more tax hikes and more borrowing in the autumn. Make no mistake – working families will pay the price for Labour’s failure and costly U-turns.
“Only the Conservatives, under new leadership, will break this cycle. Only the Conservatives believe in sound money and low taxes.”
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