UK borrows more than expected as PM contenders promise 4.9 billion pounds

The UK borrowed more than expected last July, according to government figures.

July’s debt hike shows that further support for consumers hit by skyrocketing fuel prices will be difficult for the country’s next prime minister, the BBC reported.

The United Kingdom’s Office for National Statistics (ONS) said on Friday that public sector debt, excluding state-owned banks, stood at 494.4 million pounds ($5.89 billion).

The Covid-19 pandemic has seen a historic jump in UK government borrowing.

A Reuters poll of economists predicted UK debt could reach 2.8 billion pounds in July. Taxes paid by the people in the country usually start being deposited in the treasury in July.

In the fiscal year 2022-23, which began this April, Britain borrowed 5.5 billion dollars, which is 1,210 billion pounds less than the same period last year, but 3,260 billion pounds more than in April-June 2019.

This borrowing is £3 billion more than the Office for Budget Responsibility watchdog (OBR) had estimated in March.
Meanwhile, both candidates in the running to succeed Prime Minister Boris Johnson are promising more financial support for every family if elected.

Meanwhile, Foreign Minister Liz Truss says she will cut taxes if she becomes prime minister. Another candidate, former finance minister Rishi Sunak, strongly opposes the proposal, saying the tax cut will further fuel inflation.

Rising inflation in the UK is hitting household incomes as well as raising the interest bill on government debt.

The UK paid £580bn in interest on its debt in July, up 63 per cent on July last year.

Overall, UK central government spending rose by 4.6 per cent in July compared to the same month last year, while income rose by 8.4 per cent, ONS data showed.

Compared to the previous year, expenditure increased by 1.5 percent in April-July period, income increased by 12.7 percent.