Government Borrowing Skyrockets to an Astounding £20.7 Billion in June, According to Reeves
In a scathing column titled "Clowning Street: Week 56", Rachel Reeves' handling of the economy has come under intense scrutiny. Financial expert Matthew Lynn describes the economic position under Reeves' leadership as unstable, with the Chancellor accused of having no capability to balance the books by former business secretary Andrew Griffith.
The single-month overspend in June 2023 exceeded the total revenue that Reeves has raised from all of her tax hikes combined, a worrying sign for the UK's financial health. This overspend, totalling £20.7 billion, marked a record high for the month and was £6.6 billion more than in June 2022.
The Treasury's borrowing has been a point of concern, with higher than expected interest payments pushing borrowing above the Office for Budget Responsibility (OBR) projection for the second month in a row. Debt interest now costs taxpayers £100 billion annually, nearly double the defence budget.
The column refers to Reeves as "Two-Tier Keir" and her team as a circus, implying that the economy is being blundered under her leadership. Economists predict a new round of tax rises in the autumn, with speculation of a raid on pensions, "sin taxes", and an extension of frozen income tax thresholds into 2029.
The plan involves netting off, against national debt, money owed by students to the government, which is largely unrecoverable. This move has been criticised for cooking the books, further fuelling concerns about the accuracy of the national debt plan.
Rachel Reeves now faces a potential £30 billion black hole in the public finances ahead of her first Autumn Budget. Markets have responded sharply, with bond investors selling off UK gilts and the FTSE 100 dipping by 0.1%.
Matthew Lynn warns that Reeves is steering the UK towards a financial crash, with the economic backdrop causing tax receipts to fall while government spending is rising. The column suggests that Reeves is tightening the grip on the microphone but loosening the grip on the wallet, a sentiment echoed by those who question her ability to manage the UK's finances effectively.
Rachel Reeves is scheduled to present her first Autumn Budget under the Labour government at the end of November 2025. The stakes are high, and the eyes of the nation will be on her as she seeks to address the economic challenges facing the UK.
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