UK Government Borrowing Surges to Fourth-Highest April Figure on Record

Strategic Insights -

The UK Government's public sector net borrowing rose to £20.2 billion in April, the fourth-highest April figure on record, putting increased pressure on Chancellor Rachel Reeves to meet her fiscal rules. The borrowing reflects the difference between Government spending and its income, largely through tax receipts. Despite a boost from the rise in employers' national insurance (NI) contributions, the fiscal year got off to a poor start. Economists have warned that the increased deficit, coupled with plans to increase defence spending and the U-turn on winter fuel payments, may necessitate future tax rises to balance the state finances in the longer term.

Key Takeaways:

  • The UK Government's public sector net borrowing rose to £20.2 billion in April, its fourth-highest April figure on record.
  • The borrowing reflects the difference between Government spending and its income, largely through tax receipts.
  • The fiscal year got off to a poor start, despite a boost from the rise in employers' national insurance (NI) contributions.
  • Economists warn that the increased deficit, coupled with plans to increase defence spending and the U-turn on winter fuel payments, may necessitate future tax rises to balance the state finances in the longer term.
  • Public sector net debt was estimated at 95.5% of UK GDP at the end of April 2025, 0.7 percentage points higher than a year earlier.
  • Central government departmental spending on goods and services rose by £4.2 billion year-on-year to £37.9 billion thanks to April pay increases and cost inflation.
  • Social benefits paid by the state rose £1.3 billion to £26.8 billion after inflation-linked rises in many benefits.

Statistics:

  • Public sector net borrowing rose to £20.2 billion in April 2025.
  • The borrowing represents the fourth-highest April borrowing since monthly records began in 1993.
  • Public sector net debt was estimated at 95.5% of UK GDP at the end of April 2025.
  • Central government departmental spending on goods and services rose by £4.2 billion year-on-year to £37.9 billion.
  • Social benefits paid by the state rose £1.3 billion to £26.8 billion.
  • The fiscal year got off to a poor start, with £1 billion higher borrowing than the same time last year.

Sources:

  • [2] Office for National Statistics (ONS), May 22, 2025, "Public sector finances, UK: April 2025"
  • [3] PA News Agency, 22 May 2025, "State borrowing rises to £20.2bn in April, official figures show"
  • [4] Office for National Statistics (ONS), 22 May 2025, "Public sector finances, UK: April 2025"
  • [5] Reuters, 22 May 2025, "UK public borrowing jumps to 4th-highest April level on record"