Soaring borrowing means we'll all feel the pinch... and here is where it could hurt

For Rachel Reeves, the hits keep on coming. The latest? Higher-than-expected government borrowing last month.

- By JAMES MOORE

The figures are enough to make anyone wince. The government spent £20.7bn more than it received in tax receipts in June, which is the second-highest figure since monthly records began in 1993 - and £6.6bn more than in the same month in 2024.

To put it in context: that number would cover the government’s share of building the £38bn Sizewell C nuclear power plant, with enough change left over to throw in a new hospital or two. In just a month.

You can probably guess when it was worse: June 2020, slap bang in the middle of the pandemic, when the state was subsidising the wages of the furloughed British workforce. The extra debt incurred as a result of that is a major cause of the problems the chancellor is currently grappling with.

The consensus forecast in the City was for borrowing of £17.5bn, but it should be said at this point that these figures are highly volatile and tough to predict. The overshoot was principally caused by higher interest payments on the vast existing debt pile, particularly IOUs linked to the retail prices index, an outdated and statistically dubious measure of inflation that is still making its presence felt in a very bad way.

I said the hits keep on coming for the chancellor. But they're coming for us, too. Unless things improve, Reeves is going to have to sit down with her team to come up with some new and exciting ways to shaft us in the autumn Budget.