UK public sector borrowing came in higher than expected in June, according to the Office for National Statistics (ONS).
Borrowing was £14.5 billion in June, £3.2 billion less than June last year, but well above the £11.6 billion forecast by the Government’s spending watchdog, the Office for Budget Responsibility (OBR).
Public sector borrowing – the difference between spending and income – is a closely watched metric when it comes to Government spending plans, and will be part of Chancellor Rachel Reeves’ calculations for the upcoming Autumn Budget.
ONS chief economist Grant Fitzner said: “The reduction from last year reflected a fall in spending, thanks to lower debt interest payments and the ending of energy support schemes, as well as higher tax revenues.”
Meanwhile, UK state debt remained at levels last seen in the early 1960s in June, the ONS said.
Public sector net debt excluding public sector banks was provisionally estimated at 99.5% of gross domestic product (GDP) at the end of June, 2.8 percentage points more than at the end of June last year.
Public sector net debt excluding public sector banks was £2,740.0 billion at the end of June 2024, provisionally estimated to be around 99.5% of the UK’s annual gross domestic product. pic.twitter.com/lUa5Pl7tOP
— Office for National Statistics (ONS) (@ONS) July 19, 2024
It comes after UK Government debt rose to levels not witnessed for more than 60 years in May.
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.”
Gora Suri, economist at consulting giant PwC UK, said: “The new Government has a tricky task on its hands when it comes to the public finances.
“The latest figures reveal that the UK’s debt at the end of June 2024 was very close to the annual value of everything produced in the economy, standing at 99.5%.
“By committing to getting debt falling as a share of GDP, while ruling out an increase to any of the four main tax revenue-raisers, the Government has given itself little wiggle room. Structural reform will be needed to help drive economic growth.”
