UK Government borrowing rose sharply in May, exceeding expectations as debt interest payments reached a record level, adding fresh pressure to the country’s public finances.
According to the Office for National Statistics (ONS), Government borrowing totalled £23.3 billion in May, up £5.4 billion, or 30.4%, compared with the same month last year. It marks the second-highest May borrowing figure on record, surpassed only during the pandemic.
The figure was significantly higher than economists’ forecasts of £18.8 billion and above the £17.7 billion projected by the Office for Budget Responsibility (OBR).
A key driver behind the increase was the soaring cost of servicing Government debt. Interest payments climbed by £4.1 billion to £11.7 billion, the highest level ever recorded for May. The rise was largely linked to higher Retail Prices Index (RPI) inflation, which affects payments on index-linked Government bonds.
The figures come amid continued economic uncertainty linked to tensions in the Middle East and concerns about slowing UK growth. Rising borrowing costs have added to the challenges facing policymakers as they attempt to maintain fiscal discipline while supporting the economy.
The latest data also arrives during a period of political uncertainty, with Prime Minister Sir Keir Starmer facing growing pressure after Greater Manchester Mayor Andy Burnham’s victory in the Makerfield by-election fuelled speculation about a future leadership challenge.
Despite the political debate, Burnham has publicly backed the Chancellor’s fiscal rules, which aim to ensure day-to-day Government spending is funded through tax revenues by the end of the decade.
The ONS reported that borrowing during the first two months of the current financial year reached £46.3 billion, almost £9 billion higher than the same period in 2025 and £7.7 billion above OBR forecasts.
Tom Davies, ONS senior statistician, said: “Borrowing in the first two months of the financial year was nearly £9 billion higher than the same period of 2025.”
He added: “Spending on debt interest, public services, investment and benefits all increased in May 2026, compared with last May, more than outweighing higher tax receipts.”
Responding to the figures, Chief Secretary to the Treasury Lucy Rigby said: “Inflation has held steady and unemployment has fallen this week, but the war in the Middle East has clearly had an impact on economies around the world.”
She added: “We have the right economic plan to deal with these challenges – protecting families and businesses from rising costs, while cutting borrowing at a faster rate than any other G7 economy.”
The latest borrowing figures are expected to increase scrutiny of the Government’s spending plans as ministers face mounting pressure from rising debt costs, slower growth and global economic uncertainty.