Banking & Finance High inflation helps to swell UK budget deficit in April By Reuters May 23, 2023 Unsplash.com Public sector net borrowing, excluding state-owned banks, rose in April to $32.26 billion Britain recorded a larger-than-expected budget deficit in April, as interest accrued on inflation-linked government bonds pushed the debt interest bill for the month to a new record, official data showed on Tuesday. Public sector net borrowing, excluding state-owned banks, rose in April to £25.56 billion ($32.26 billion), the Office for National Statistics (ONS) said. A Reuters poll of economists had pointed to public sector net borrowing, excluding state-owned banks, of £19.75 billion. In April, Britain added £9.8 billion to its debt interest bill – the highest total for the month since comparable records started in 1993 and largely reflecting interest payable on inflation-linked government bonds. Britain’s rate of consumer price inflation was the highest in Western Europe in March, remaining above 10 percent. Data on Wednesday is expected to show a sharp drop in April, to around 8.2 percent, according to the Reuters poll consensus. The ONS revised down its estimate for the budget deficit in the 2022/23 financial year that ended in March to £137.1 billion, from £139.2 billion previously. In March the Office for Budget Responsibility forecast that borrowing in 2022/23 would settle at £152.4 billion, £15.3 billion more than the ONS estimate. “Debt and borrowing remain too high now – which is why it’s one of our priorities to get debt falling,” finance minister Jeremy Hunt said in response to the data.
