22 July 2025
If you are covering the latest UK public sector borrowing figures, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“The latest UK public sector finances highlight the parlous state of the government’s fiscal position, with some of the highest borrowing on record for June. Borrowing was £20.7bn in June 2025, £6.6bn more than in June 2024 and the second-highest June borrowing since monthly records began in 1993. The highest was in June 2020 during the pandemic, showing just how extraordinary these figures are. Borrowing also came in ahead of forecast of what the OBR had expected at a time when relations between it and the government are strained.
“Recent events have shown how hard it is for the government to bring spending down. Welfare reform was heavily watered down, while winter fuel payments have been reinstated for millions. As we approach the summer recess this is all going to result in additional speculation of what tax rises will be coming down the line given the need to plug the holes. Bond markets are craving some fiscal discipline, so without any spending cuts, taxes will have to rise.
“This is all going to negatively impact the UK’s growth position. Labour continually speaks about achieving economic growth but if taxes do need to keep rising to cater for an ever increasing debt, that growth is going to prove elusive.”
