British public sector net borrowing was £3.101 billion pounds in July, the Office for National Statistics have said this morning.
It was the biggest July total since 2021, when the deficit surged during the COVID-19 pandemic.
The ONS cited rising social benefits, pushed higher by inflation, and rising government wages as drivers of increased spending compared with a year ago.
With borrowing £3 billion higher-than-expected in July, the deteriorating state of the public finances illustrate the challenges that Rachel Reeves will face ahead of her first Budget this Autumn.
“The fiscal inheritance facing the Chancellor is one of rising taxes, increasing spending challenges, and very little wriggle room in the event of bad economic news. This combines to create a challenging backdrop for the new Government to realise its ambitions of boosting growth while putting the public finances on a sustainable path.”
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