The budget deficit continued to fall in May, with year-to-date borrowing of £35.9 billion down £6.4 billion on last year. But it was £6.4 billion above our most recent forecast profile. This overshoot reflects both lower receipts and higher spending – with debt interest spending in the year to date a fifth higher than forecast thanks to the jump in RPI inflation. With the Bank of England now expecting CPI inflation to reach 11 per cent later this year, debt interest can be expected to continue to overshoot our forecast.