The Office for National Statistics (ONS) said on Tuesday the UK Government’s borrowing is estimated to have been £24.3 billion in May 2021 — the second-highest May borrowing since monthly records began in 1993, but £19.4 billion less than in May 2020 during the pandemic.

The ONS said UK public sector net debt stood at almost £2.2 trillion at the end of May 2021 or around 99.2% of gross domestic product (GDP), the highest ratio since the 99.5% recorded in March 1962.

Public sector net borrowing was estimated to have been £53.4 billion in the financial year-to-May 2021 — the second-highest financial year-to-May borrowing since monthly records began in 1993, but £37.7 billion less than in the same period last year during the pandemic.

Provisional May 2021 estimates of central government receipts were £56.9 billion, £7.5 billion more than in May 2020, while central government bodies spent £81.8 billion, £10.9 billion less than in May 2020.

Expressed as a ratio of GDP, the UK’s public sector net borrowing in the year to March 2021 was 14.3%, the highest such ratio since the end of World War Two, when it was 15.2% in the year to March 1946.

Giving reaction to the borrowing statistics, Paul Craig, portfolio manager at Quilter Investors: “The level of borrowing may indeed have fallen on last month, but we are still well away from ‘normal’ levels and May’s additional £24.3bn of public sector net borrowing makes the black hole that little bit bigger.

“The overall debt-to-GDP ratio is hovering just below the mythical 100% rubicon excluding public sector banks and borrowing constitutes almost £1 in every £4 of public spending.

“We’re already seeing the public finances infuse political debates on various spending packages, not least around the future funding of social care, and the tussle between Number 10 and Number 11 will become a tug of war with every additional billion added to the Exchequer’s books.

“Levelling-up and achieving net zero will not come cheap, but ‘no’ seems to be the current answer when the Prime Minister asks the bill payers permission.

“From a market perspective, investors should be braced for the hangover that follows the borrowing binge.

“The jobs market is stable and the economy is ticking along nicely, but inflation is creeping up not so nicely.

“As we’ve seen in the US last week with the Fed’s hawkish turn, the Bank of England could well be looking at tapering its monetary support to prevent the strengthening economy from becoming red hot.

“Investors will need to keep an ear on noises coming from central banks, including the Bank of England.

“When central banks move on policy, markets will react quickly.

“In this environment, diversification and a focus on ‘quality’ should provide more robust protections to whether the tapering storm.”