UK borrows less than expected in June in boost for Burnham
Summary
The UK government borrowed £16 billion in June, which was less than expected and lower than the same month last year. This good news supports Prime Minister Andy Burnham’s plans to cut VAT on household electricity bills and signals some strength in the British economy despite global concerns.Key Facts
- Public sector net borrowing in June was £16 billion, £7.9 billion less than June 2025.
- Borrowing was £300 million below the Office for Budget Responsibility’s forecast.
- Lower inflation-linked debt interest costs helped reduce borrowing.
- Debt interest payments were £11.8 billion in June, still high but down £5.3 billion from last year.
- The UK economy shows signs of resilience despite higher energy prices and global uncertainties.
- Prime Minister Burnham plans to remove VAT on domestic electricity bills starting 1 October.
- Chancellor John Healey will fund the VAT cut by cancelling the digital ID programme this year.
- The government aims to follow fiscal rules but may face pressure to increase taxes or borrowing due to spending needs.
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