From Morningstar: 2025-05-22 06:29:00

UK government borrowing rose to £20.2 billion last month, exceeding expectations and putting pressure on Chancellor Rachel Reeves to meet fiscal rules. The Office for National Statistics reported the fourth-highest April borrowing figure on record, reflecting the gap between government spending and income, largely from tax receipts.

Reeves had to borrow more than anticipated, surpassing analyst predictions of £17.6 billion, as she aims to balance day-to-day spending with revenues by 2029-30. The increase in borrowing was driven by rises in public sector pay, National Insurance payments, and benefits and state pensions, leading to higher departmental spending and social benefits.

Public sector net debt stood at 95.5% of UK GDP, 0.7 percentage points higher than the previous year. The ONS noted that April borrowing was the fourth-highest for the start of the financial year in over 30 years, with increased receipts offset by rising public services’ costs and benefits spending. The ONS revised down the fiscal year borrowing figure to £148.3 billion after more tax receipt data.

Chief secretary to the Treasury Darren Jones highlighted efforts to stabilize public finances, leading to interest rate cuts and investments in healthcare, infrastructure, and national security. The government’s plan for change includes rebuilding the NHS, strengthening borders, and delivering on the country’s priorities.



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