Hopes were raised that Rishi Sunak might have more wriggle room to navigate the post-Covid inflation and debt minefield today as government borrowing came in below estimates in May.
The government was in the red by £24.3billion last month, down from £43.8billion a year earlier at the height of the pandemic – and crucially below the Office for Budget Responsibility’s forecasts. However, the figure was still the second highest on record for the month and £18.9 billion more than in May 2019 before the pandemic struck, while national debt now stands at a staggering £2.2trillion.
The grim fiscal backdrop was highlighted as former chancellor Ken Clarke warned that there is a ‘big risk’ of inflation running out of control – and urged Mr Sunak to raise more revenue now to make the government less vulnerable to a resulting spike in interest payments.
Responding to the figures, Mr Sunak reiterated his pledge to ‘get the public finances on a sustainable footing’.
‘That’s why at the Budget in March I set out the difficult but necessary steps we are taking to keep debt under control in the years to come,’ he added.