Borrowing up by £1.8bn in July compared to last year

Government borrowing surged by more than expected in July in a blow to Rachel Reeves as she prepares to deliver her first Budget.

- ARCHIE MITCHELL

The Office for National Statistics (ONS) said public sector net borrowing stood at £3.1bn last month, £1.8bn more than a year ago and the highest July borrowing since 2021.

The total for July was £3bn more than predicted by Britain’s official forecaster, the Office for Budget Responsibility, and higher than the £1.1bn most economists were pencilling in. Borrowing in the financial year from the end of March to July was £51.4bn, £500m less than in the same four-month period a year earlier, but the fourth highest year-to-July borrowing since monthly records began in January 1993, the ONS said.

The borrowing figures come after the new chancellor last month accused the previous Conservative government of leaving a £21.9bn black hole in the public finances, through unfunded commitments that she said it had “covered up”.