Market News
UK borrowing climbs as inflation pushes up debt costs - REUTERS
LONDON (Reuters) -Britain borrowed more than expected in June as high inflation added to the government's debt costs, according to official data that is likely to add to speculation about the need for fresh tax increases later this year.
Public sector net borrowing totalled 20.7 billion pounds ($27.88 billion) last month, the data showed.
Britain's budget watchdog, the Office for Budget Responsibility, forecast borrowing of 17.1 billion pounds in June when it published its outlook in March.
That was before a strong inflation reading in April had the effect of pushing up inflation-linked government bond payments.
Tuesday's data from the Office for National Statistics showed interest payable on central government debt was 16.4 billion pounds in June, the second-highest June central government interest bill since monthly records began in 1997.
Finance minister Rachel Reeves is expected to raise taxes in a budget statement towards the end of 2025 in order to remain on track to meet her targets for fixing the public finances.
($1 = 0.7425 pounds)
(Writing by William Schomberg; Editing by Kate Holton)
