The UK’s public sector net debt (PSND ex) reached £2.596 trillion at the end of June 2023 — around 100.8% of the UK’s annual gross domestic product (GDP) — as borrowing continued at levels last seen in the early 1960s, according to the UK’s Office for National Statistics (ONS).

Public sector net borrowing excluding public sector banks (PSNB ex) in the financial year to June 2023 was £54.4 billion, £12.2 billion more than in the same three-month period last year — but £7.5 billion less than the £61.9 billion forecast by the Office for Budget Responsibility.

PSNB ex in June 2023 was £18.5 billion, £0.4 billion less than in June 2022, but the third-highest June borrowing since monthly records began in 1993, as higher tax receipts and a substantial fall in debt interest payable compared with June 2022, were largely offset “by increased benefit payments and other costs.”

In June 2023, the interest payable on UK central government debt was £12.5 billion, £7.5 billion less than the record £20.0 billion in June 2022, but still the third-highest in any single month on record.

“Now more than ever we need to maintain discipline with the public finances,” said the UK government’s finance minister Jeremy Hunt.

“We are at a crucial juncture and need to avoid reckless spending.

“As this week’s fall in inflation showed, we will start to see results if we stick to our plan to halve inflation, grow the economy and get debt falling.”

Martin Beck, Chief Economic Advisor to the EY ITEM Club, said there was now a good chance the UK’s fiscal watchdog would later this year judge the government to be on course to break its own fiscal rules.

“With an election on the horizon, any additional fiscal tightening will likely be pencilled in for after the country heads to the polls,” said Beck.