Early enhance for Andy Burnham as figures exhibits large fall in authorities borrowing final month
Sharp fall in debt interest payments last month helped lower government borrowing costs but experts warn the new Andy Burnham government still faces tough challenges ahead, with the threat of tax rises
Andy Burnham delivering his first speech as PM(Image: Getty Images)
Andy Burnham and his new Chancellor, John Healey, got an early boost as official figures revealed government borrowing dropped by a third in June.
The Office for National Statistics (ONS) said borrowing – the difference between what the government rakes in from taxes and spends – stood at £16billion last month, down £7.9billion on June last year. It was also £300million below the Office for Budget Responsibility’s forecast.
The welcome fall was largely because of lower inflation-linked debt interest costs, the ONS said.
Former defence secretary Mr Healey, whose appointment as Chancellor by new PM Andy Burnham came as a surprise, said: “The Prime Minister and I have talked about how we will work in lockstep to meet the fiscal rules with a buffer against uncertainty and how we’ll make life more affordable for working people right across the UK…
“Fiscal control is the first duty of any Chancellor. It is mine. And fiscal credibility is the bedrock for economic stability and for national security, and you heard the Prime Minister this afternoon say, in this more dangerous world, we will meet our commitments on defence to our international allies…
Andy Burnham and I have known each other a long time, we’ve worked together over many years and talked together in recent weeks. We share the values, we share the vision, and we will start together now, Prime Minister and Chancellor, to build that new hope, to build that new economy.”
According to the ONS, central government debt interest payments fell to £11.8billion in June 2026, down £5.3billion on a year ago but still the fourth highest June on record.
Nabil Taleb, economist at PwC UK, said: “This month’s figures offer some tentative encouragement. The key question is whether their economic plans ease pressure on the public purse or add to it.
“With borrowing costs still sensitive and fiscal headroom limited, even modest commitments can carry significant consequences. What matters is whether ambition is matched by credible funding and a convincing grip on borrowing.
“If plans run ahead of what the public finances can support, pressure could build quickly through higher financing costs and sharper fiscal trade-offs. The coming months should show whether the new agenda creates breathing space or adds to the strain.”
