Threadneedle Street will have all the economic limelight this week as the Bank of England sets interest rates tomorrow. With this morning’s grim inflation update, a rate rise looks all but certain. But this morning, the Office for National Statistics (ONS) released an update on Rishi Sunak’s third pledge: to get debt falling. The figures show another target quickly escaping Sunak.
Public sector borrowing in the month to May rose to some £20 billion, almost £11 billion more than the same month last year. That makes it the second most expensive May on record. Meanwhile, in the first couple of months of this financial year, the government borrowed just under £43 billion – some £20 billion more than April and May last year and £2.1 billion higher than Office for Budget Responsibility (OBR) forecasts. As a result, debt in cash terms and as a share of GDP is skyrocketing.
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