19th Jun 2026 07:10
(Alliance News) - UK government borrowing rose more than expected in May, as debt interest costs hit a record for the month, while separate figures showed retail sales rebounded on warm weather and promotional activity.
According to the Office for National Statistics on Friday, public sector net borrowing, excluding public sector banks, totalled GBP23.3 billion in May, up 30% from GBP17.9 billion a year earlier.
The figure exceeded the GBP17.7 billion forecast by the Office for Budget Responsibility by GBP5.6 billion.
Borrowing in the first two months of the 2026-27 financial year totalled GBP46.3 billion, up GBP8.9 billion from the same period a year ago and GBP7.7 billion above the OBR forecast of GBP38.6 billion.
The ONS said central government debt interest payable rose to GBP11.7 billion in May, up GBP4.1 billion, or 54%, from a year earlier and the highest May figure on record.
Public sector net debt stood at 95.1% of gross domestic product at the end of May, up 0.4 percentage points from a year earlier and remaining around levels last seen in the early 1960s.
The current budget deficit, which measures borrowing to fund day-to-day public sector activities, was GBP18.5 billion in May. In the financial year to date, the deficit totalled GBP34.5 billion, GBP7.0 billion higher than a year ago and GBP6.0 billion above the OBR's forecast.
Separately, the ONS reported that UK retail sales volumes rose 1.2% in May from April, beating expectations after a revised 1.0% decline the previous month.
Sales volumes increased 0.4% in the three months to May compared with the three months to February.
The ONS said department stores benefited from good weather during the month, while promotions boosted sales at non-store retailers.
"Retailers suggested that promotions and the hot weather in May increased sales volumes for non-store retailers and department stores," the statistics office said.
Computer and telecommunications retailers also continued to benefit from product launches earlier in the year.
By Eva Castanedo, Alliance News reporter
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