Britain's public borrowing in June hits second-high on record: ONS
The borrowing, the difference between spending and tax income, surged 6.6 billion pounds year-on-year and was 3.5 billion pounds more than the March projection made by the government's spending watchdog, the Office for Budget Responsibility (OBR).
It was only behind that of June 2020 when the country was hit by the COVID-19 pandemic, according to the ONS.
The rising costs of providing public services and a large rise in the interest payable on index-linked gilts pushed up overall spending more than the increases in income from taxes and national insurance contributions, causing borrowing to rise in June, said Richard Heys, acting chief economist of the ONS.
Public sector net debt excluding public sector banks was estimated at 96.3 percent of the country's gross domestic product (GDP) at the end of June. The reading rose 0.5 percentage points from that at the end of June 2024 and remained at levels last seen in the early 1960s, said the ONS.
"The latest borrowing figures underline what many of us already thought -- that the government is almost certain to announce another set of tax increases at the Autumn Budget," said Tom Clougherty, executive director at the Institute of Economic Affairs.
Clougherty noted that given the country's deepening economic malaise, high borrowing costs, and the government's failure to implement even minor spending cuts, it is hard to see another way out.
Britain is facing a bleak outlook for public finances, said the OBR in a report released in early July. It warned of a substantial erosion of the country's capacity to respond to future shocks and growing pressures on public finances and projected public borrowing to further increase in the mid and long terms. (1 pound = 1.34 U.S. dollar)
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