Government borrowing above expectations and highest since pandemic

Government borrowing rose to the highest amount since the pandemic in July, official figures show.

Not since 2021 has there been a July with such high borrowing, according to data from the Office for National Statistics (ONS).

It means there was a £3.1bn difference between what the government took in from things like taxes and how much was spent on public sector services. The government has committed to borrowing only to invest and to bring down debt.

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The sums are also higher than expected when looked at across a four-month period.

Independent forecasters the Office for Budget Responsibility (OBR) expected borrowing to be £4.7bn less and come in at £46.6bn. Instead, it reached £51.4bn.

Why has borrowing gone up?

While the government took in more money from income tax that was offset by the increased cost of public services and benefits.

The cost of borrowing that debt, measured by interest payments, was reduced, the ONS added.

What does it mean?

Despite better-than-expected economic growth in recent weeks Chancellor Rachel Reeves is widely expected to raise some taxes in her first October budget having said there is a £22bn black hole in the public finances.