19th June 2026
The latest figures from the Office for National Statistics (ONS) present a striking picture of the UK's public finances.
Britain is collecting more tax than ever before. Employment remains relatively high, wages have increased and inflation has pushed many workers into higher tax brackets. Yet despite these record tax receipts, the Government continues to borrow at levels that would once have been considered extraordinary.
The obvious question is: where is all the money going?
Borrowing remains alarmingly high
The Government borrowed £23.3 billion during May 2026.
That is:
£5.4 billion more than May 2025
£5.6 billion higher than the Office for Budget Responsibility (OBR) had forecast
The second-highest borrowing ever recorded for a May, exceeded only by the exceptional borrowing during the COVID pandemic.
Even more concerning, borrowing for the first two months of the financial year has already reached £46.3 billion, almost £9 billion higher than the same period last year.
That suggests the Government is already falling behind its own fiscal plans.
Debt interest is swallowing billions
Perhaps the most eye-catching figure in the report is the cost of servicing Britain's national debt.
In May alone, the Government paid £11.7 billion in interest on its debt.
That is:
54% higher than a year ago
The highest debt interest bill ever recorded for the month of May (excluding the effects of inflation).
This money does not build a hospital, employ a teacher or repair a road. It simply pays the interest on money borrowed in the past.
As debt grows, so does the annual interest bill, creating a vicious circle that becomes increasingly difficult to escape.
If taxes are rising, why is borrowing still increasing?
Many people assume that higher taxes automatically reduce borrowing.
In reality, the Government's spending has risen even faster than its income.
The ONS figures show that expenditure continues to increase because of:
Higher NHS and public service costs.
Rising State Pension and welfare payments.
Increased defence spending.
Higher capital investment.
The rapidly growing cost of servicing the national debt.
In simple terms, more money is coming into the Treasury than ever before—but even more is going out.
Britain's debt remains historically high
Public sector net debt now stands at around 95% of the UK's annual economic output (GDP).
That is the highest level since the early 1960s, outside the exceptional circumstances following the Second World War.
High debt leaves governments with less flexibility when unexpected events occur, whether another financial crisis, recession or international conflict.
The hidden tax problem
Another reason tax revenues are growing is fiscal drag.
As wages rise with inflation, millions of workers are paying more income tax because tax thresholds have remained frozen.
Many people have not received a real increase in spending power, yet they are paying a larger share of their income in tax.
This has helped push government revenues to record levels without increasing the basic rates of income tax.
What happens next?
If borrowing continues to exceed forecasts, the Chancellor may eventually have only a limited number of options.
These include:
Raising taxes further.
Cutting public spending.
Reducing investment.
Borrowing even more.
Or hoping that stronger economic growth increases tax revenues naturally.
Each option carries political and economic risks.
Questions every taxpayer should ask
These figures raise some important questions.
If Britain is collecting record tax revenues, why is borrowing still close to record levels?
Is the current level of public spending sustainable?
How much of today's tax revenue is simply paying interest on yesterday's borrowing?
What happens if interest rates remain higher for longer?
Will today's borrowing leave future generations facing even higher taxes?
These are questions every government, regardless of political party, will eventually have to answer.
The latest ONS figures show that Britain's public finances remain under severe pressure.
Borrowing in May was the second highest ever recorded for the month, while debt interest reached a record May level.
Read the full ONS report HERE
Perhaps the most significant message is this: record tax receipts are no longer enough to balance the books.
Unless economic growth improves significantly or spending is brought under tighter control, Britain risks becoming trapped in a cycle where rising taxes are consumed by rising spending and ever-growing debt interest.
That is a challenge that will shape economic policy for many years to come.