Not since July 2021, within the midst of the COVID-19 pandemic, was state borrowing so low, based on knowledge from the Workplace for Nationwide Statistics (ONS).
Will increase in tax and nationwide insurance coverage receipts meant public sector internet borrowing was £1.1bn in July, which means there was a £1.1bn hole between authorities spending and revenue.
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However borrowing was nonetheless £6bn greater within the first 4 months of the monetary yr, which began in April, than the identical interval in 2024.
Regardless of a £2.3bn drop in month-to-month borrowing when July 2025 is in comparison with July 2024, the state nonetheless spent extra on the price of that lending.
The quantity of curiosity paid on authorities debt was £7.1bn, £200m greater than a yr earlier.
The price of authorities borrowing has elevated in latest months because the rate of interest traders demand on loans issued to the UK (bonds) rose.
Initially of the week, the federal government’s long-term borrowing price, as measured by the rate of interest on 30-year bonds (referred to as the gilt yield), closed on the highest stage since 1998.
Responding to the figures, Ms Reeves’s deputy, chief secretary to the Treasury, Darren Jones, stated:
“Far too much taxpayer money is spent on interest payments for the longstanding national debt.
“That is why we’re driving down authorities borrowing over the course of the parliament – so working folks do not need to foot the invoice and we will put money into higher colleges, hospitals, and companies for working households.”
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