UK borrows more than expected as impact of Iran war takes toll

May figure of £23.3bn underlines challenge facing Andy Burnham if he ends up as Labour leader The UK borrowed a higher-than-expected £23.3bn in May amid the economic fallout from the Iran war, underlining the fiscal pressures facing Andy Burnham if he takes over as the Labour leader. In figures released shortly after Burnham’s victory in the Makerfield byelection, the Office for National Statistics (ONS) said public sector net borrowing – the difference between government spending and income – for the month was the second highest for any May on record. With debt interest costs higher than expected as financial markets responded to the Middle East conflict, borrowing was £5.6bn ahead of the forecast published alongside the chancellor Rachel Reeves’s spring statement in March. City economists had expected much lower borrowing of £18.5bn, down from a revised £23bn in April. Tom Davies, a senior statistician at the ONS, said: “Borrowing in the first two months of the financial year was nearly £9bn higher than in the same period of 2025. “Spending on debt interest, public services, investment and benefits all increased in May 2026 compared with last May, more than outweighing higher tax