In June, UK government borrowing exceeded expectations, resulting in a budget deficit of £20.7 billion, primarily due to a £16.4 billion surge in debt-interest payments. Over the first three months of the fiscal year, borrowing reached £57.8 billion, aligning with prior forecasts but reflecting a £7.5 billion increase compared to the previous year. This scenario presents challenges for Chancellor Rachel Reeves, with rising concerns over tax hikes and potential downgrades to growth projections amidst a backdrop of volatile bond markets and internal party pressures.
The UK government borrowing surpassed forecasts in June, with a budget deficit of £20.7 billion driven by a surge in debt-interest payments.
Borrowing for the first three months of the fiscal year reached £57.8 billion, around £7.5 billion higher than the previous year, aligning with forecasts from the Office for Budget Responsibility.
The high level of borrowing poses challenges for Chancellor Rachel Reeves, amid speculations on tax hikes and potential downgrades to growth projections.
June's deficit was significantly influenced by a £16.4 billion debt-interest payment, marking the third highest for a month on record.
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