PwC comments on Public Sector Finance data for June 2025

Commenting on the latest ONS Public Sector Finance data, Nabil Taleb, economist at PwC UK, says:

“Public sector net borrowing came in at £20.7bn in June 2025, £6.6bn more than was recorded in June last year and the second highest June borrowing since records began, surpassed only during the pandemic. More importantly, the borrowing figure is £3.5bn more than the OBR forecast for the month. The increase in public spending was largely because of a significant increase in debt interest payments.

“Debt interest payments came in at £16.4bn in June, up 105% from last year and the second highest June figure since monthly records began 27 years ago. This reflects the fiscal challenge the Chancellor faces. Higher debt servicing costs as a share of total revenues leave the public finances more exposed to future economic shocks. 

“The OBR recently reported that the UK now has the third highest borrowing costs among advanced economies and with global uncertainty persisting, particularly around the impact of US policy, the cost of servicing UK debt could climb even higher. Domestically, the Chancellor faces a challenge after the government’s U-turn on welfare reform blew a £5bn hole in the public finances. Her fiscal headroom was already under strain following higher-than-expected borrowing since the Spring Statement, and the latest data deepens the challenge. As she looks ahead to the Autumn Budget, the Chancellor will see how the next few months play out both domestically and in the global markets but speculation around tax rises is likely to persist throughout the summer.”