UK borrowed bigger than forecast £24.3bn in April as inflation adds to benefits bill | Government borrowing
Britain borrowed more than expected in April as high inflation increased pension and benefit costs, concerns about the Iran war and political uncertainty increased debt costs.
Office for National Statistics (ONS) It said public sector net borrowing (the difference between government spending and revenue) was £24.3bn in April 2026, £4.9bn higher than in April 2025.
The figure was £3.4bn higher than forecasts by City economists and the Office for Budget Responsibility, amid bond market tensions over the Middle East conflict and Labour’s leadership battle.
Rising borrowing costs in financial markets pushed the UK’s debt interest payments to £10.3bn in April; This is £900 million more than a year ago and the highest on all April records.
ONS chief economist Grant Fitzner said: “Borrowing this month was significantly higher than in April last year, and although incomes increased compared to April 2025, this was more than offset by higher spending on benefits and other costs.”
The figures come as the UK government’s borrowing costs in financial markets have risen sharply in recent weeks. As Keir Starmer’s grip on power weakens, UK government bonds, known as gilts, have come under heavy selling pressure.
With torrid conditions in global markets, investors fear his successor as prime minister will increase borrowing. Earlier this week the International Monetary Fund urged the UK to comply with Chancellor Rachel Reeves’ plan The government decided to cut its borrowing as it warned it did not have the space to add significantly to already high debt levels.
Martin Beck, chief economist at consultancy WPI Strategy, said: “A future prime minister may complain about being ‘on the grid’ in bond markets, but that’s a difficult argument to sustain for a government that is on track to borrow more than £100bn this year and is reliant on investors’ willingness to finance its deficit.”
Inflation-related increases in many social benefits and the triple lock of pensions also contributed to the increase in borrowing in April. Net benefits paid by central government rose by £2.7bn to £29.5bn for the month, the ONS said.
The figures come after Britain defied expectations to record a stronger-than-expected economic performance at the start of 2026, ahead of the outbreak of the Iran war.
Highlighting the strength of the economy, the ONS cut its borrowing forecast for the financial year ending March 2026 by £3bn to £129bn. This was 15% lower than the borrowing figure a year ago and £3.7bn below official forecasts by the OBR.
Treasury Undersecretary Lucy Rigby said: “Earlier this week the IMF agreed that we have the right economic plan to reduce the deficit.
“We are reducing borrowing and debt – through our actions we are reducing government borrowing by over £20bn last year – and boosting growth through £120bn of additional capital investment through parliament.”
