Skip to content
Search

Latest Stories

Leaping debt costs add to UK government borrowing in May: Rishi Sunak says 'We are taking a balanced approach'

Britain’s official budget watchdog has said it expects interest costs in June to reach almost £20 billion due to the accelerating inflation rate.

Leaping debt costs add to UK government borrowing in May: Rishi Sunak says 'We are taking a balanced approach'

SURGING debt interest costs triggered by the leap in inflation forced the British government to borrow more than expected in May at £14 billion ($17.14 bn), according to official data published on Thursday (23).

Economists polled by Reuters had a median forecast of £12bn for borrowing excluding public sector banks.


Finance minister Rishi Sunak remains under pressure to borrow more after he added £15bn last month to his support for households hit by the cost-of-living crisis, even as a slowing economy threatens to reduce tax revenues.

He repeated his warning of the hit to the public finances from rising inflation after the data from the Office for National Statistics.

“Rising inflation and increasing debt interest costs pose a challenge for the public finances, as they do for family budgets." Sunak said. “That is why we are taking a balanced approach - using our fiscal firepower to provide targeted help with the cost of living, while remaining on track to get debt down.

“Being responsible with the public finances now will mean future generations aren’t burdened with even higher debt repayments, and we can secure our economy for the long term.”

The government's interest bill rose by 70 per cent from May last year to £7.6bn, the biggest ever interest cost for the month of May and the third highest for any month.

Britain's official budget watchdog has said it expects interest costs in June to reach almost 20 billion pounds due to the accelerating inflation rate.

British inflation-linked government bonds are pegged to the Retail Price Index which hit almost 12 per cent in May.

Borrowing in the April-May period - the first two months of the financial year - was 15 per cent lower than a year earlier at £35.9bn but was almost £20bn more than in the April-May period of 2019, before the Covid-19 pandemic hit.

Michal Stelmach, an economist at KPMG UK, said Sunak's attempts to fix the public finances were slowing after he bumped up his support for households last month.

"Debt reduction this year remains a long shot," Stelmach said, adding he expected borrowing to overshoot the government's target by about £20bn this year on the back of higher spending and weaker economic growth.

Public sector debt would only peak in 2023-24, missing the latest official forecast by two years, Stelmach said.

Thursday's data showed total public debt, excluding public-sector banks, stood at £2.363 trillion or 95.8 per cent of GDP, up from 95.6 per cent in April.

The Office for National Statistics cut its estimate for borrowing in the 2021/22 financial year, which ended in March, by almost £1bn to £143.7bn. It also lowered its borrowing estimate for the previous year by almost £8bn to £309.6bn.

(Reuters)

More For You

Bangladesh-protests-Getty
Anti-government protesters display Bangladesh’s national flag at Sheikh Hasina’s palace in Dhaka. (Photo: Getty Images)
Getty Images

House of Commons screens Bangladesh protest documentaries

TWO documentaries on the July 2024 pro-democracy protests in Bangladesh were screened at the House of Commons on 20 May. The event was hosted by Apsana Begum MP, Chair of the All-Party Parliamentary Group for Bangladesh, at Portcullis House.

The screening featured the international premiere of Deepak Kumar Goswami Speaking, a 21-minute film narrated by a member of Bangladesh’s Hindu minority. It covers the student-led protests and subsequent state crackdown, also examining global financial systems linked to authoritarian regimes.

Keep ReadingShow less
Rachel Reeves

Rachel Reeves will also outline steps taken by the UK government to reduce interest rates and provide economic stability.(Photo: Getty Images)

Getty Images

Reeves to highlight UK trade deals at G7 summit

CHANCELLOR Rachel Reeves arrived in Banff, Canada, on Monday for a two-day G7 summit with finance ministers from leading democracies. Reeves is expected to focus on the UK’s recent trade deals and economic performance.

She said, “This Government is laser-focused on delivering for the British people. That’s why in the past two weeks we have struck three major deals with the US, EU and India that will kickstart economic growth and put more money in people’s pockets as part of our Plan for Change.”

Keep ReadingShow less
Gujarat’s Asiatic lion

The rise in lion numbers is being viewed as a major success for India’s conservation programme

iStock

Gujarat’s Asiatic lion population grows by 32% in five years

The population of Asiatic lions in Gujarat has increased significantly, rising from 674 in 2020 to 891 in 2025, according to the latest census results announced by Chief Minister Bhupendra Patel on Wednesday.

The figures were gathered during the 16th Asiatic lion census, which was carried out over four days from 10 to 13 May across 11 districts in the state. This marks a notable rise of over 32 per cent in the number of lions over the past five years.

Keep ReadingShow less
Starmer signals winter fuel cut reversal after elections defeat

Keir Starmer gestures during a reception in Downing Street, central London. (Photo by HANNAH MCKAY/POOL/AFP via Getty Images)

Starmer signals winter fuel cut reversal after elections defeat

PRIME MINISTER Keir Starmer on Wednesday (21) signalled he was open to reversing a widely criticised cut in winter fuel payments to the elderly, weeks after a bruising set of local election results for his Labour party.

Starmer told parliament he recognised that older people were still feeling the pressure of a cost-of-living crisis and he wanted to ensure that more pensioners become eligible for winter fuel payments.

Keep ReadingShow less
Venomous Adders in London Spark Nationwide Snake Alert

London is not exempt from this warning

iStock

Urgent snake alert issued across UK as venomous adders spotted in London

An urgent warning has been issued across parts of the UK following a rise in sightings of adders, the country’s only native venomous snake. The public is being advised to remain alert, particularly in areas where the snakes are known to reside, including London.

The increase in sightings in 2025 has been noted in regions such as southern England, Cornwall and Wales. In response, local police forces and wildlife organisations have issued statements urging caution, especially when walking in areas with tall grass or natural habitats.

Keep ReadingShow less