Chancellor Rachel Reeves faces scrutiny regarding the UK's finances after a spike in government borrowing, which totaled £20.7 billion in June. This figure is £6.6 billion higher than last year and marks the second highest June borrowing on record. The Office for National Statistics reports a significant rise in debt interest payments, reaching £16.4 billion, largely due to increased Retail Prices Index inflation affecting index-linked bonds. Analysts suggest these financial pressures could compel the government to raise taxes in the forthcoming budget, with sin taxes among the potential measures.
Chancellor Rachel Reeves is under pressure regarding the UK's public finances after a reported higher-than-expected government borrowing in June due to soaring debt interest payments.
June borrowing rose to £20.7 billion, which is £6.6 billion higher than the previous year and represents the second highest June borrowing since records began.
Interest payable on debt increased significantly to £16.4 billion as a result of a rise in Retail Prices Index inflation impacting index-linked government bonds.
Experts warn that the high borrowing figures could lead the government to consider tax hikes in the upcoming autumn budget, particularly through sin taxes.
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