FX.co ★ UK Public Borrowing Slightly Above Forecasts

In May 2025, the UK experienced an increase in public sector net borrowing, excluding public sector banks, reaching £17.7 billion. This amount was slightly higher than the previous year's £17.0 billion and surpassed market forecasts of £17.1 billion. The rise in total public sector spending, up by £6.4 billion compared to the previous year, was primarily driven by increased expenditures on public services and benefits. This increase was somewhat offset by a £0.7 billion reduction in debt interest payments. Concurrently, total receipts rose by £5.7 billion, bolstered by a £1.8 billion boost in national insurance contributions. This boost was partly attributed to the higher employer contribution rate that was introduced the previous month. For the financial year up to May, borrowing amounted to £37.7 billion, £1.6 billion more than during the same period in 2024, marking the third-highest total for April and May on record. By the end of May, public sector net debt, excluding public sector banks, stood at an estimated 96.4% of GDP.