Higher UK borrowing adds to pressure on Reeves
The UK government's borrowing increased significantly in August due to a substantial rise in debt interest payments, adding pressure on Chancellor Rishi Sunak and his successor, Kwasi Kwarteng. According to the Office for National Statistics, the government borrowed £11.8 billion last month, which was £3 billion more than the same period last year. This was largely driven by a 60% surge in debt interest payments to £7.7 billion, reflecting the impact of rising inflation on the government's borrowing costs. The higher-than-expected borrowing figure comes at a challenging time for the new government, which is facing growing concerns about the state of the UK economy and the impact of its planned tax cuts. The situation is likely to intensify the debate around the government's fiscal policy and the need to strike a balance between supporting economic growth and maintaining fiscal discipline.
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