The UK borrowed more than expected in April as high inflation drove up the cost of pensions and benefits, amid concern over the Iran war and political uncertainty adding to debt costs.
The Office for National Statistics (ONS) said public sector net borrowing – the difference between government spending and income – was £24.3bn in April 2026, £4.9bn higher than in April 2025.
Amid bond market jitters over the Middle East conflict and a Labour leadership challenge, the figure was £3.4bn higher than forecast by City economists and the Office for Budget Responsibility.
Rising borrowing costs on financial markets drove the UK’s debt interest payments to £10.3bn in April, £900m more than a year ago and the highest in any April on record.
Grant Fitzner, the ONS chief economist, said: “Borrowing this month was substantially higher than in April last year and although receipts increased compared with April 2025, this was more than offset by higher spending on benefits and other costs.”
The figures come amid a sharp rise in the UK government’s borrowing costs on financial markets in recent weeks. With Keir Starmer’s grip on power appearing to be fading, UK government bonds, known as gilts, have come under heavy selling pressure.
Amid febrile conditions in global markets, investors fear his successor as prime minister would add to borrowing. Earlier this week the International Monetary Fund urged Britain to “stay the course” on the chancellor Rachel Reeves’s plan to cut government borrowing, as it warned the government lacked room to add significantly to its already elevated debt levels.
Martin Beck, the chief economist at the consultancy WPI Strategy, said: “A future prime minister may rail against being ‘in hock’ to the bond markets, but that’s a difficult argument to sustain for a government on course to borrow well over £100bn this year and dependent on investor willingness to fund its deficit.”
Inflation-linked increases in many benefits and the pensions triple lock also contributed to the borrowing increase in April. The ONS said net social benefits paid by central government rose by £2.7bn to £29.5bn for the month.
The figures come after Britain defied expectations to record a stronger-than-anticipated economic performance at the start of 2026, before the outbreak of the Iran war.
Highlighting the strength of the economy, the ONS revised down its borrowing estimate for the financial year ended in March 2026 by £3bn to £129bn. This was 15% lower than the borrowing figure a year earlier, and £3.7bn below the official forecasts made by the OBR.
Lucy Rigby, the chief secretary to the Treasury, said: “Earlier this week the IMF agreed we had the right economic plan to reduce the deficit.
“We are cutting borrowing and debt – with our actions reducing government borrowing by over £20bn last year – while driving growth through £120bn of additional capital investment over the parliament.”
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