Higher inflation delivers record debt interest spending

The budget deficit continues to fall year on year, with April-to-June borrowing of £55.4 billion down £5.7 billion on last year. But it was £3.7 billion above our most recent forecast profile, largely reflecting higher spending, alongside modestly lower receipts. Debt interest spending hit a record high – for both the single month of June (£19.4 billion) and for the year to date (£33.7 billion). Much of this is accrued debt interest on index-linked gilts, which will be paid out in cash terms over several decades as these gilts are redeemed.