Rachel Reeves suffered another body blow ahead of the Budget today with figures showing borrowing hit a five-year high last month.
Public sector spending was £18billion higher than income in August despite surging tax revenues. It was a peak for the month since 2020, when the country was scrambling to deal with Covid, and above the £12.8billion analysts had pencilled in.
Alarmingly for the Chancellor, borrowing for the year to date is running at £83.8billion, £16.2billion more than the equivalent period in 2024-25 - and £11.4billion more than the Treasury's OBR watchdog forecast.
The bleak data come as pressure mounts on Ms Reeves over the looming Budget, with warnings that downgrades in productivity and growth are widening the black hole in the government books.
She is also facing demands for higher spending on areas such as defence, and rising interest costs on the UK's debt mountain.
