Public Sector Finances Uk - June 2023 - Third Highest Borrowing Since 19193

21st July 2023

Public sector net borrowing excluding public sector banks (PSNB ex) in June 2023 was £18.5 billion, £0.4 billion less than in June 2022, and the third-highest June borrowing since monthly records began in 1993; higher tax receipts and a substantial fall in debt interest payable compared with June 2022, were largely offset by increased benefit payments and other costs.

In June 2023, the interest payable on central government debt was £12.5 billion, £7.5 billion less than the record £20.0 billion in June 2022 and the third-highest in any single month on record.

PSNB ex in the financial year to June 2023 was £54.4 billion, £12.2 billion more than in the same three-month period last year but £7.5 billion less than the £61.9 billion forecast by the Office for Budget Responsibility.

Public sector net debt (PSND ex) was £2,596.2 billion at the end of June 2023 or provisionally estimated at around 100.8% of the UK's annual gross domestic product (GDP), continuing at levels last seen in the early 1960s.

This month we have revised down our end-of-May 2023 estimate of public sector net debt as a ratio of GDP by 0.2 percentage points from 100.1% to 99.9% with the latest published GDP estimate indicating that the output of the economy was higher than our initial estimate - see Section 12: Strengths and limitations.

Excluding the Bank of England, public sector net debt was £2,330.3 billion or around 90.4% of GDP, £265.9 billion (or 10.4 percentage points) lower than the wider measure.

Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £20.1 billion in June 2023, £1.7 billion above the £18.4 billion OBR forecast.

Public sector net worth (PSNW ex) was in deficit by £646.1 billion at the end of June 2023; this compares with a £538.5 billion deficit at the end of June 2022.

Borrowing in June 2023
In June 2023, the public sector spent more than it received in taxes and other income, requiring it to borrow £18.5 billion. This was £0.4 billion less than was borrowed in June 2022 but is the third-highest June borrowing since monthly records began in 1993, behind June 2020 and 2022.

Increases in central government tax receipts and a substantial fall in debt interest payable compared with June 2022, were largely offset by additional costs related to inflation and the rising cost of living, including the energy support schemes (introduced in October 2022) and up-rated benefit payments.

Central government forms the largest part of the public sector and the relationship between its receipts and expenditure is the main determinant of public sector borrowing.

In June 2023, central government borrowed £19.4 billion, £0.4 billion less than in June 2022 and £0.5 billion less than the £19.9 billion forecast by the Office for Budget Responsibility (OBR) in their Economic and fiscal outlook - March 2023.

Central government's receipts were £77.4 billion, £5.6 billion more than in June 2022 and £2.9 billion more than the £74.5 billion forecast by the OBR. Of this £77.4 billion, tax receipts were £57.3 billion, £4.6 billion more than in June 2022, with increases in income tax, corporation tax and VAT receipts of £2.0 billion, £1.6 billion, and £1.0 billion, respectively.

Read the full ONS report HERE