Official figures show that the UK borrowed £23.3 billion in May, as higher debt interest costs added pressure to the public finances.
Borrowing, which measures the gap between Government spending and tax income, was almost a third higher than in May last year. It was also £5.6bn above the Office for Budget Responsibility’s March forecast.
The OBR’s projection was made before the impact of the Middle East conflict became clearer. Since then, inflation has risen following the outbreak of the Iran conflict, with further increases expected as higher oil prices feed through the economy.
The Office for National Statistics said interest payable on Government debt reached £11.7bn in May, the highest figure ever recorded for that month. The rise underscores the challenge facing the Government as it tries to manage spending, borrowing, and tax receipts amid a more difficult economic backdrop.
On Thursday, the Bank of England held interest rates steady. The decision reflected the difficult balance between a weakening jobs market and expectations that inflation could climb further in the coming months.
There was some brighter news from the high street. Separate official figures showed retail spending rose by 1.2% in May, helped by unusually warm weather.
Retailers reported stronger sales of outdoor furniture and fans, as shoppers responded to the good weather and promotional offers.
The figures point to a mixed picture for the UK economy, with consumer spending showing some resilience while borrowing costs continue to weigh heavily on the public finances.
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