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2mo ago

UK Borrowing Rises to £24.3bn in April, Second-Highest April on Record

ONS figures published Friday show higher welfare payouts combined with a record April £10.3bn interest charge that widens the gap with OBR forecasts and raises pressure on debt servicing.

Britain's Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street on the day she is to deliver the Mais Lecture, in London, Britain, March 17, 2026. REUTERS/Isabel Infantes/File Photo
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Overview

  • The Office for National Statistics, in data published Friday, recorded April public sector borrowing of £24.3 billion, about £3.4 billion more than the OBR's monthly forecast and 25% higher than April 2025.
  • Higher benefits spending was a key driver, with welfare outlays rising by about £2.7 billion and more than offsetting an increase in receipts.
  • Debt interest costs hit a record April high of £10.3 billion as rising inflation and RPI-linked indexation pushed up payments on gilts.
  • Analysts say rising gilt yields — partly driven by the Iran war's energy shock and political uncertainty over Labour leadership — have added an estimated 20–40 basis points to yields and could add billions to interest costs versus Budget assumptions.
  • The figures trim fiscal headroom for the OBR's March forecast of borrowing falling to 3.6% of GDP, leave public sector net debt near 94% of GDP, and increase the likelihood of tougher policy choices such as higher taxes on energy firms or further spending adjustments that would affect households and public services.