Lower interest payments on inflation-linked debt cut government borrowings to the lowest monthly for June for five years, the ONS said today.
UK borrowing in June was £14.5 billion or down by £3.2 billion from a year ago and the lowest June borrowing total since June 2019.
Interest payable on central government debt was £7.4 billion in June 2024, £5.5 billion less than in June 2023, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI), the ONS added.
Inflation has fallen to 2% in recent months after sharp falls in food and fuel costs.
Economist forecasts before the announcement had been for a total of around £14.8 billion, compared to May’s higher-than-expected £13.6 billion though the Office for Budget Responsibility predicted £11.6 billion.
ONS chief economist Grant Fitzner said: “The reduction from last year reflected a fall in spending, thanks to lower debt interest payments and the ending of energy support schemes, as well as higher tax revenues.”
Total borrowing or Public sector net debt (PSND) excluding public sector banks was 99.5% of gross domestic product (GDP) at the end of June 2024 or 2.8 percentage points more than at the end of June 2023, and at levels last seen in the early 1960s.
Excluding the Bank of England, debt was 91.6% of GDP.