April borrowing surges to 24.3bn as debt interest bill breaks month record

Public sector net borrowing increased to £24.3bn in April 2026/27, the highest April reading since the 2020 pandemic shutdown and £3.4bn above the Office for Budget Responsibility forecast. The borrowing bill was £4.9bn larger than in the same month a year earlier, when borrowing already raised concerns about fiscal arithmetic. Interest payments reached £10.3bn in April, the highest on record for the opening month of any financial year, and Britain now spends more than £100bn annually servicing its debt. Higher gilt yields tightened conditions for fresh borrowing, with 10-year yields briefly reaching a post-2008 peak before easing slightly after political signals about respecting fiscal rules.

"Public sector net borrowing climbed to £24.3 billion in April, the highest April reading since the pandemic shutdown of 2020 and £3.4 billion above the £20.9 billion pencilled in by the Office for Budget Responsibility. Figures published on Friday by the Office for National Statistics showed the bill was £4.9 billion, or roughly a quarter, larger than the same month a year earlier, when borrowing came in at £20.2 billion and already prompted warnings about the fragility of the Treasury's fiscal arithmetic."

"The standout figure, however, was not the headline overshoot but the cost of servicing the national debt. Interest payments alone reached £10.3 billion in April, the highest on record for the opening month of any financial year. Britain is now spending more than £100 billion a year keeping its debt pile rolling, broadly equivalent to the annual schools budget for England."

"Yields on 10-year UK government bonds, the standard proxy for the cost of fresh state borrowing, touched a fresh post-2008 peak last week before retreating modestly after Andy Burnham, the Greater Manchester mayor widely viewed as a potential prime ministerial challenger, publicly committed to respecting the fiscal rules should he take the top job. That intervention steadied nerves in the City but did not undo the damage."

Read at Business Matters