UK borrowing in May surges by more than expected
Summary
The UK government borrowed £23.3 billion in May, which is significantly more than expected and almost 30% higher than May last year. The extra borrowing cost is partly due to higher interest payments on debt and rising prices caused by the conflict in the Middle East.Key Facts
- The UK borrowed £23.3 billion in May 2024.
- This borrowing is nearly one-third higher than the same month last year.
- The Office for Budget Responsibility (OBR) had predicted £5.6 billion less borrowing than what actually happened.
- The OBR made its forecast before the Middle East war effects were clear.
- Interest payments on government debt rose to £11.7 billion, the highest May figure ever recorded.
- Higher borrowing costs are linked to the war and rising energy prices, which also pushed up inflation.
- A peace deal between the US and Iran caused oil prices to drop recently, but economic effects from the conflict continue.
- The higher borrowing shows challenges for the UK government’s finances and may limit actions of the next Prime Minister.
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