UK Public Sector Borrowing Reaches Highest April Level Since 2020

Public sector borrowing reached £24.3 billion in April, the highest total for the month since the Covid pandemic in 2020. The figure was £4.9 billion higher than a year earlier and above market expectations. Spending on benefits rose £2.7 billion, driven by inflation-linked increases and an earnings-linked rise to the state pension.

Debt interest payments hit a record £10.3 billion for April, up £0.9 billion from the previous year.

Retail sales volumes fell 1.3 percent in April, the largest monthly decline since May 2025. Motor fuel sales dropped 10.2 percent, the steepest fall since November 2020. Clothing store sales also declined, partly attributed to variable weather conditions.

The Chief Secretary to the Treasury said the government had reduced borrowing by over £20 billion last year. The official added that working families had benefited from lower inflation and interest rate cuts. A shadow chancellor noted that debt interest spending reached its highest April level on record.

Borrowing costs have risen since the start of the Iran war, with markets indicating the Bank of England may need to raise rates. Analysts at Capital Economics and Pantheon Macroeconomics said lower growth forecasts could keep public sector borrowing elevated into the medium term.