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MNI BRIEF: UK Debt Costs Up, Set To Soar Further In June

(MNI) London
(MNI) London

UK government cost of borrowing hits GBP 7 billion in May, but looks set to break all records in June, statistics office says.

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UK debt interest payments rose to the third highest on record in May, touching GGP7.6 billion, the Office for National Statistics said Thursday, but they warned that the inflationary surge this year meant worse was to come, with June set to be by far the biggest month on record to date.

The ONS notes the Office for Budget Responsibility forecasts June debt interest costs are set to soar to GBP19.7 billion, more than double the previous high of GBP9.1 billion. The sharp increase in the June costs is being driven by the sharp increase in the RPI inflation measure between March and April, the benchmark for June calculations. This, as the chart below shows, will likely be the biggest monthly cost in FY22/23 -- a year where the OBR forecast total interest costs at GBP87.2 billion, up from GBP69.9 billion.

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UK debt interest payments rose to the third highest on record in May, touching GGP7.6 billion, the Office for National Statistics said Thursday, but they warned that the inflationary surge this year meant worse was to come, with June set to be by far the biggest month on record to date.

The ONS notes the Office for Budget Responsibility forecasts June debt interest costs are set to soar to GBP19.7 billion, more than double the previous high of GBP9.1 billion. The sharp increase in the June costs is being driven by the sharp increase in the RPI inflation measure between March and April, the benchmark for June calculations. This, as the chart below shows, will likely be the biggest monthly cost in FY22/23 -- a year where the OBR forecast total interest costs at GBP87.2 billion, up from GBP69.9 billion.