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Government borrowing rose to the highest amount since the pandemic in July, official figures show, as public sector pay increased.

Not since 2021 has there been a July with such high borrowing, according to data from the Office for National Statistics (ONS).

It means there was a £3.1bn difference between what the government took in from things such as taxes and how much was spent on public sector services. The government has committed to borrowing only to invest and to bring down debt.

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The sums are also higher than expected when looked at across a four-month period.

Independent forecasters the Office for Budget Responsibility (OBR) expected borrowing to be £4.7bn less and come in at £46.6bn. Instead, it reached £51.4bn.

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Sky’s business correspondent Paul Kelso has been analysing what cuts chancellor Rachel Reeves has announced and whether tax rises are inevitable.

Why has borrowing gone up?

More on Debt

While the government took in more money from income tax – that was offset by the increased cost of public services and benefits.

It’s been attributed to higher-than-forecast spending by government departments, which the OBR said “appears related to strong growth in public sector pay”.

The trend of government spending is expected to continue.

“Data on central government spending remain highly provisional at this time of year. Nevertheless, they indicate that departmental spending for 2024-25 could significantly exceed the March 2024 forecast,” the OBR said.

The cost of borrowing that debt, measured by interest payments, was reduced, the ONS added.

What does it mean?

Despite better-than-expected economic growth in recent weeks Chancellor Rachel Reeves is widely expected to raise some taxes in her first October budget having said there is a £22bn black hole in the public finances.

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Today’s figures and comments from the Treasury are likely to add to that expectation as they illustrate the difficult choices Ms Reeves faces.

“Today’s figures are yet more proof of the dire inheritance left to us by the previous government,” chief secretary to the Treasury Darren Jones said.

“A £22bn black hole in the public finances this year, a decade of economic stagnation, and public debt at its highest level since the 1960s, with taxpayers’ money being wasted on debt interest payments rather than on our public services.

“We are taking the tough decisions that are needed to fix the foundations of our economy, modernise our public services and rebuild Britain so we can put more money back into people’s pockets across the country”.

Data released last week, however, showed an economy in good health with lower inflation and unemployment and greater growth than had been expected.

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UK on ‘slippery slope’ to ‘death on demand’, Justice Secretary Shabana Mahmood warns ahead of assisted dying vote

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UK on 'slippery slope' to 'death on demand', Justice Secretary Shabana Mahmood warns ahead of assisted dying vote

The UK is on a “slippery slope towards death on demand”, according to the justice secretary ahead of a historic Commons vote on assisted dying.

In a letter to her constituents, Shabana Mahmood said she was “profoundly concerned” about the legislation.

“Sadly, recent scandals – such as Hillsborough, infected blood and the Post Office Horizon – have reminded us that the state and those acting on its behalf are not always benign,” she wrote.

“I have always held the view that, for this reason, the state should serve a clear role. It should protect and preserve life, not take it away.

“The state should never offer death as a service.”

Analysis: Justice secretary’s intervention is potentially embarrassing for the PM

On 29 November, MPs will be asked to consider whether to legalise assisted dying, through Kim Leadbeater’s Terminally Ill Adults (End of Life) Bill.

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Minister ‘leans’ to assisted dying bill

Details of the legislation were published last week, including confirmation the medicine that will end a patient’s life will need to be self-administered and people must be terminally ill and expected to die within six months.

Ms Mahmood, however, said “predictions about life expectancy are often inaccurate”.

“Doctors can only predict a date of death, with any real certainty, in the final days of life,” she said. “The judgment as to who can and cannot be considered for assisted suicide will therefore be subjective and imprecise.”

Read more: Gordon Brown says assisted dying should not be legalised

Under the Labour MP’s proposals, two independent doctors must confirm a patient is eligible for assisted dying and a High Court judge must give their approval.

The bill will also include punishments of up to 14 years in prison for those who break the law, including coercing someone into ending their own life.

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Details of end of life bill released

Read more: Where does the cabinet stand on assisted dying?

However, Ms Mahmood said she was concerned the legislation could “pressure” some into ending their lives.

“It cannot be overstated what a profound shift in our culture assisted suicide will herald,” she wrote.

“In my view, the greatest risk of all is the pressure the elderly, vulnerable, sick or disabled may place upon themselves.”

Kim Leadbeater waits to present the Assisted Dying Bill. File pic: House of Commons/Reuters
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Kim Leadbeater waits to present the Assisted Dying Bill. File pic: House of Commons/Reuters

Labour MP Kim Leadbeater, who put forward the bill, said some of the points Ms Mahmood raised have been answered “in the the thorough drafting and presentation of the bill”.

“The strict eligibility criteria make it very clear that we are only talking about people who are already dying,” she said.

“That is why the bill is called the ‘Terminally Ill Adults (End of Life) Bill’; its scope cannot be changed and clearly does not include any other group of people.

“The bill would give dying people the autonomy, dignity and choice to shorten their death if they wish.”

In response to concerns Ms Mahmood raised about patients being coerced into choosing assisted death, Ms Leadbeater said she has consulted widely with doctors and judges.

“Those I have spoken to tell me that they are well equipped to ask the right questions to detect coercion and to ascertain a person’s genuine wishes. It is an integral part of their work,” she said.

In an increasingly fractious debate around the topic, multiple Labour MPs have voiced their concerns.

In a letter to ministers on 3 October, the Cabinet Secretary Simon Case confirmed “the Prime Minister has decided to set aside collective responsibility on the merits of this bill” and that the government would “therefore remain neutral on the passage of the Bill and on the matter of assisted dying”.

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‘Immediate action’ taken after blueprints of prisons in England and Wales leaked on dark web

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'Immediate action' taken after blueprints of prisons in England and Wales leaked on dark web

“Immediate action” is being taken after blueprints of jail layouts were shared online.

The maps detailing the layouts of prisons in England and Wales were leaked on the dark web over the past fortnight, according to The Times.

The detailed information is said to include the locations of cameras and sensors, prompting fears they could be used to smuggle drugs or weapons into prisons or help inmates plan escapes.

Security officials are now working to identify the source of the leak and who might benefit from the details.

The Ministry of Justice did not disclose which prisons were involved in the breach.

A government spokesperson said in a statement: “We are not going to comment on the specific detail of security matters of this kind, but we are aware of a breach of data to the prison estate and, like with all potential breaches, have taken immediate action to ensure prisons remain secure.”

The leak comes amid a chronic prison overcrowding crisis, which has led to early release schemes and the re-categorising of the security risks of some offenders to ease capacity pressures.

Justice Secretary Shabana Mahmood is launching a sentencing review in a bid to ease the crisis.

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Starmer says UK will ‘set out a path’ to raise defence spending to 2.5% in spring

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Starmer says UK will 'set out a path' to raise defence spending to 2.5% in spring

The UK will “set out a path” to lift defence spending to 2.5% of national income in the spring, the prime minister has said, finally offering a timeframe for an announcement on the long-awaited hike after mounting criticism.

Sir Keir Starmer gave the date during a phone call with Mark Rutte, the secretary general of NATO, in the wake of threats by Moscow to target UK and US military facilities following a decision by London and Washington to let Ukraine fire their missiles inside Russia.

There was no clarity though on when the 2.5% level will be achieved. The UK says it currently spends around 2.3% of GDP on defence.

Volodymyr Zelenskyy, Nato Secretary General Mark Rutte and  Keir Starmer, during a trilateral meeting in 10 Downing Street.
Pic: PA
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Ukraine leader Volodymyr Zelenskyy, Sir Keir Starmer and NATO boss Mark Rutte in October. Pic: PA

Ukraine war latest: Follow live updates

A spokeswoman for Downing Street said that the two men “began by discussing the situation in Ukraine and reiterated the importance of putting the country in the strongest possible position going into the winter”.

They also talked about the deployment of thousands of North Korean soldiers to fight alongside Russia.

“The prime minister underscored the need for all NATO countries to step up in support of our collective defence and updated on the government’s progress on the strategic defence review,” the spokeswoman said.

“His government would set out the path to 2.5% in the spring.”

The defence review will also be published in the spring.

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While a date for an announcement on 2.5% will be welcomed by the Ministry of Defence, analysts have long warned that such an increase is still well below the amount that is needed to rebuild the armed forces after decades of decline to meet growing global threats from Russia, an increasingly assertive China, North Korea and Iran.

They say the UK needs to be aiming to hit at least 3% – probably higher.

With Donald Trump returning to the White House, there will be significantly more pressure on the UK and other European NATO allies to accelerate increases in defence spending.

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