LONDON (dpa-AFX) - The UK budget deficit widened more than estimated in June on higher debt servicing costs, which has added pressure on Chancellor Rachel Reeves to raise taxes at the autumn budget.
Public sector net borrowing rose by GBP 6.6 billion from the previous year to GBP 20.7 billion in June, the Office for National Statistics reported Tuesday.
This was bigger than the GBP 17.1 billion shortfall forecast by the Office for Budget Responsibility. Moreover, it was the second-highest borrowing in any June since monthly records began in 1993.
Data showed that interest payable on government debt rose GBP 8.4 billion to GBP 16.4 billion on rising cost of index-linked debt due to the rise in inflation.
The current budget deficit, which is borrowing to fund day-to-day public sector activities, was GBP 16.3 billion in June. This was GBP 7.1 billion more than in June 2024.
In the financial year to June, borrowing totaled GBP 57.8 billion, which was GBP 7.5 billion more than in the same three-month period of 2024.
At the end of June 2025, public sector net debt excluding public sector banks was provisionally estimated at 96.3 percent of gross domestic product, up 0.5 percent of GDP on a year earlier.
Chief Secretary to the Treasury Darren Jones 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.'
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