Chancellor admits inflation is hitting public purse with government debt interest payments up £2bn

CHANCELLOR Nadhim Zahawi admitted today that soaring inflation was hitting Britain's public finances - with debt interest payments up by more than £2 billion.

- Nicholas Cecil

The Office for National Statistics said Government borrowing hit £4.9 billion in July, significantly ahead of City predictions of some £2.8 billion.

Debt interest payments climbed to £5.8 billion, up from £3.5 billion in the same month last year due to Retail Price Index (RPI) inflation rocketing.

These payments are linked to RPI which leapt to 12.3 per cent in July, while the broader Consumer Price Index (CPI) the more often quoted inflation measure - hit a new 40-year-high of 10.1 per cent, deepening the cost-of-living crisis for millions of households.