Tue, 22 Jul 2025

Tue, 22 Jul 2025 Higher UK borrowing adds to pressure on Reeves

A big increase in debt interest payments meant government borrowing was higher than expected last month.

* UK government borrowing rose by £6.6bn in June to £20.7bn, exceeding expectations.
* Higher spending on public services and debt interest payments outstripped tax revenue, including National Insurance contributions.
* Analysts say it is increasingly likely that the Chancellor will have to raise taxes at the Autumn Budget.
* The long-term outlook for public finances remains difficult due to recent U-turns on welfare and persistent economic growth headwinds.
* Interest payments on government debt rose to £16.4bn in June, nearly double the amount paid at the same point last year.
* Borrowing in the first three months of the current financial year has reached £57.8bn, an increase of £7.5bn from the same period in 2024.
* Experts warn that "things will probably get worse for the chancellor" and that tax increases are likely to be needed at the Autumn Budget.
* The Chancellor has refused to rule out tax increases and has hinted at extending the freeze on income tax thresholds.
* Sticking to fiscal rules is "non-negotiable" according to the Chancellor, but critics argue that these rules are being broken.
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