Interest payable on government debt remains persistently high

For the second month of the fiscal year, government net borrowing has overshot the OBR forecast. The net debt stock has reached a new 21^st century high and as interest rates continue to rise, the relative burden of this debt will continue to grow.

The 2023/24 financial year has begun with significant net borrowing reaching a cumulative £42.9 billion in May – £19.6 billion more than the same point in 2022/23. This is only outstripped by the 2020/21 financial year where cumulative net borrowing reached £100.5 billion by the same point. Compared to 2019/20, net borrowing is £26.5 billion ahead this year highlighting the unprecedented scale of borrowing by the government.

The COVID-19 pandemic and the energy crisis have driven net debt to level not seen since the 1960s, reaching 100.1% of GDP in May. The OBR predicts that it will continue to grow to 103.1% by the end of