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UK Government Borrowing Jumps as Debt Interest Costs Hit Record May High
EconomistsChancellorHealthHealth Pandemic
Executive Summary
AI-generatedUK government borrowing increased significantly in May 2026, reaching £23.3 billion, which was higher than both previous years and forecasts from major economic bodies. This surge was driven by a record high increase in interest payments on government debt, attributed to rising inflation impacting index-linked bonds. The figures highlight growing fiscal challenges amid geopolitical instability and political uncertainty.
Key Insights
- Public sector net borrowing reached £23.3 billion in May 2026, marking a 30.4% increase compared to the previous year.
- Interest payments on government debt hit an all-time high for any May, jumping by £4.1 billion to £11.7 billion due to rising RPI inflation.
- The actual borrowing figure exceeded expectations from most economists and the Office for Budget Responsibility (OBR).
- Increased spending across debt interest, public services, investment, and benefits contributed to the higher overall borrowing.
- The article notes that long-term borrowing costs are rising due to weakened growth outlook following the Middle East conflict.
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