Public sector finances, UK: June 2024

• Borrowing – the difference between public sector spending and income – was £14.5 billion in June 2024, £3.2 billion less than in June 2023 and the lowest June borrowing since 2019.

• The interest payable on central government debt was £7.4 billion in June 2024, £5.5 billion less than in June 2023, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI).

• Public sector net debt excluding public sector banks was provisionally estimated at 99.5% of gross domestic product (GDP) at the end of June 2024; this was 2.8 percentage points more than at the end of June 2023, and remains at levels last seen in the early 1960s.

• Excluding the Bank of England, debt was 91.6% of GDP, 4.8 percentage points more than at the end of June 2023 but 7.9 percentage points lower than the wider debt measure.

• Public sector net worth excluding public sector banks was in deficit by £726.4 billion at the end of June 2024, a £77.2 billion larger deficit than at the end of June 2023.

• Central government net cash requirement (excluding UK Asset Resolution Ltd and Network Rail) was £14.5 billion in June 2024, £5.6 billion less than in June 2023.

The public sector spent more than it received in taxes and other income in June 2024, requiring it to borrow £14.5 billion.

Initial estimates for June 2024 suggest that borrowing was £3.2 billion lower than June last year but £2.9 billion higher than the £11.6 billion forecast by the Office for Budget Responsibility (OBR).

Borrowing in June 2024 was the sixth highest June borrowing since monthly records began in 1993, behind those of the last four years and that of 2009 after the global financial crisis.

A breakdown of net borrowing by sub-sector and a summary of central government receipts and expenditure data are presented in Tables 1 to 3 in our Public sector finances summary tables: Appendix M dataset.

Central government borrowing

Central government forms the largest part of the public sector and includes HM Revenue and Customs, the Department of Health and Social Care, the Department for Education, and the Ministry of Defence.

The relationship between central government's receipts and expenditure is an important determinant of public sector borrowing. In June 2024, central government borrowed £14.6 billion, £3.3 billion less than in June 2023.

Central government receipts

Central government's receipts were £79.9 billion in June 2024, £1.2 billion more than in June 2023. Of this £1.2 billion increase in revenue:

• central government tax receipts increased by £2.0 billion to £60.6 billion, with increases in Income Tax, Value Added Tax (VAT) and Corporation Tax receipts of £1.0 billion, £0.8 billion and £0.5 billion, respectively

• compulsory social contributions decreased by £1.2 billion to £13.9 billion, largely because of the reductions in the main rates of National Insurance in 2024

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

Central government expenditure

Central government spending data for June 2024 are provisional. There is uncertainty around these estimates until more detailed departmental information becomes available later in the year.

Central government's total expenditure was £94.5 billion in June 2024, £2.1 billion less than in June 2023. Of this overall £2.1 billion decrease in spending:

• interest payable on central government debt decreased by £5.5 billion to £7.4 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• subsidies paid by central government decreased by £0.9 billion to £2.4 billion, largely because of the closure of the energy support schemes that remained active until June 2023

• net social benefits paid by central government increased by £1.1 billion to £25.0 billion, largely because of inflation-linked benefits uprating

• central government departmental spending on goods and services increased by £2.0 billion to £35.3 billion, as inflation and pay rises increased running costs

Interest payable on central government debt

In June 2024, the interest payable on central government debt was £7.4 billion. This was the lowest interest payable in any June since 2020 and a third of that of June 2022, which was the highest interest payable in any month since records began (for this component) in 1997. 

The large monthly changes in the RPI since early 2021 led to volatility in debt interest payable, with the largest three months on record occurring in 2022 and 2023. The additional interest caused by RPI inflation is described as “capital uplift” and affects the value of the gilt principal.

Capital uplift was £2.8 billion in June 2024, largely reflecting the 0.5% increase in the RPI between March and April 2024. This increased the capital uplift on the three-month lagged index-linked gilts (as shown on the UK Debt Management Office website), which make up around three-quarters of the index-linked gilt stock.

A monthly time series of capital uplift on the index-linked gilts in issue is available as series identifier code JNYY. This series is illustrated as the blue portion of each bar in Figure 2 and excludes the uplift payable at the time of an index-linked gilt redemption. These redemption payments are already recorded as accrued interest payable across the life of each index gilt.

For further details of our approach, see our Calculation of interest payable on government gilts methodology.

The £14.5 billion borrowed in June 2024, combined with an upward revision of £1.8 billion to our previously published financial year to May 2024 borrowing estimate, brings our provisional estimate for the total borrowed in the financial year to June 2024 to £49.8 billion. This was £1.1 billion less than was borrowed in the same three months last year, but £3.2 billion more than the £46.6 billion forecast by the Office for Budget Responsibility.

A breakdown of net borrowing by sub-sector and a summary of central government receipts and expenditure data are presented in Tables 1 to 3 in our Public sector finances summary tables: Appendix M dataset.

Of the £49.8 billion borrowed by the public sector (excluding public sector banks) in the financial year to June 2024, central government borrowed £64.3 billion. This larger central government borrowing was partially offset by a £5.5 billion Bank of England (BoE) surplus and balanced by remaining sub-sectors.

The borrowing of both sub-sectors is affected by payments totalling £11.4 billion made by central government to the BoE in May 2024 under its Asset Purchase Facility Fund (APF) indemnity agreement.

As with similar intra-public sector transactions, these payments are public sector borrowing neutral. They increase central government's borrowing by £11.4 billion compared with the same period the previous year but reduce the borrowing impact of the BoE by an equal and offsetting amount.

Central government receipts

Central government’s receipts were £233.0 billion in the financial year-to-June 2024, £2.4 billion more than in the same period last year. Of this £2.4 billion increase in revenue:

• central government tax receipts increased by £4.3 billion to £176.7 billion, with increases in Income Tax, Corporation Tax and Value Added Tax (VAT) receipts of £1.9 billion, £1.9 billion and £0.3 billion, respectively

• compulsory social contributions decreased by £3.7 billion to £39.7 billion, largely because of the reductions in the main rates of National Insurance in 2024

A detailed breakdown of central government income is presented in our Public sector current receipts: Appendix D dataset.

Central government expenditure

Central government spending data for the early part of the financial year is provisional, and there is uncertainty around these estimates until more detailed departmental information becomes available later in the year.

Central government's total expenditure was £297.3 billion in the financial year to June 2024, £4.6 billion more than in June 2023. Of this overall £4.6 billion increase in spending:

• net social benefits paid by central government increased by £4.1 billion to £76.0 billion, largely because of inflation-linked benefits uprating

• central government departmental spending on goods and services increased by £4.8 billion to £103.9 billion, as inflation increased running costs

• payments to support the day-to-day running of local government increased by £2.3 billion to £40.2 billion; being both central government spending and a local government receipt these intra government transfers have no impact on public sector borrowing

• subsidies paid by central government decreased by £3.5 billion to £7.0 billion, largely because of the closure of the energy support schemes that remained active until June 2023

• interest payable on central government debt decreased by £6.6 billion to £24.4 billion, largely because the interest payable on index-linked gilts rises and falls with the Retail Prices Index (RPI)

• central government net investment increased by £3.5 billion to £27.9 billion, in part because of a regular payments from HM Treasury to the Bank of England APF Fund which increased by £1.6 billion compared with a year earlier; these central government transactions are public sector net borrowing neutral but do affect our public sector net borrowing excluding the Bank of England (PSNB ex BoE) measure 

Local government

Initial estimates suggest that local government was in surplus by around £8.1 billion in the three months to June 2024, a £2.3 billion larger surplus than in the same period a year earlier. Our provisional monthly estimates for the UK are currently based on published budget data for England, Scotland, and Wales.

The public sector borrowed £122.1 billion in the financial year ending (FYE) March 2024. This was £5.9 billion less than the £128.1 billion borrowed in the FYE March 2023 but £8.0 billion more than the £114.1 billion forecast by the Office for Budget Responsibility (OBR).

This is our third provisional estimate of borrowing for the FYE March 2024. This estimate is £1.5 billion higher than our initial estimate of £120.6 billion published in the March 2024 release.

Our borrowing estimate for the FYE March 2024 remains provisional; it is likely to be revised further over the coming months as we replace our provisional estimates of both receipts and expenditure with finalised data.

Public sector borrowing consists of two broad components: the current budget deficit (or borrowing to fund day-to-day activities) and net investment (capital expenditure).

In the FYE March 2024, the public sector current budget deficit was £51.2 billion, £30.9 billion less than in the FYE March 2023, while net investment increased by £25.0 billion to £70.9 billion over the same 12-month period.

Expressing borrowing as a ratio of gross domestic product (GDP) – the value of everything produced in the UK economy in a 12-month period – gives an estimate of its affordability and provides a more robust measure for comparison of the UK's fiscal position over time.

Our third provisional estimate for the total borrowed in the financial year ending (FYE) March 2024 as a ratio of GDP is 4.5%, 0.1 percentage points higher than our initial estimate of 4.4% published in the March 2024 release.

Our article, The use of GDP in public sector fiscal ratio statistics, describes the methodology used for the presentation of our GDP ratios.

The public sector balance sheet describes its financial position at a point in time. It shows its liabilities (amounts owed) and its assets (amounts owned).

There are several measures of the public sector balance sheet that we discuss in our What the UK government owns and what it owes blog.

Table 3 presents the narrowest balance sheet measure, which is the redemption value of central government gilts. It then builds upon this measure, widening coverage by both the sub-sector and the range of asset and liability types included to reach the far wider measure of public sector net worth, which we explain in our Wider measures of the public sector balance sheet: public sector net worth methodology. 

Our Public sector balance sheet tables: Appendix N presents a detailed reconciliation between the balance sheet measures summarised in Table 2.

Public sector net debt

The most widely used balance sheet measure used to describe the UK public sector's financial position at a point in time is public sector net debt excluding public sector banks (PSND ex). Expressing net debt as a ratio of gross domestic product (GDP) gives an estimate of its affordability and provides a more robust measure for comparison of the UK's fiscal position over time.

The net debt-to-gross domestic product (GDP) ratio at the end of June 2024 was provisionally estimated at 99.5%, 2.8 percentage points higher than a year ago. However, this is a highly provisional estimate and is likely to be revised in future publications because it partly relies on GDP estimates based on the March 2024 Office for Budget Responsibility forecast.

Public sector net debt excluding the Bank of England (BoE) was £2,524.4 billion at the end of June 2024, or around 91.6% of GDP, £215.6 billion (or 7.9 percentage points of GDP) less than the wider measure. This difference is largely a result of the BoE's quantitative easing activities, including the gilt-purchasing activities of the Asset Purchase Facility (APF) Fund.

The APF's gilt holding is not recorded directly as a component of public sector net debt. Instead, in June 2024, we recorded the £100.4 billion difference between the £695.0 billion of reserves created to purchase its gilts (at market value at the time of purchase) and their £594.6 billion redemption value. For details of the BoE's contribution to public sector net debt, see Table PSA9A of our Public sector finances tables 1 to 10: Appendix A dataset.

As of May 2024, the APF no longer holds any corporate bonds, and this aspect of the scheme has closed.

Public sector net worth

Public sector net worth excluding public sector banks (PSNW ex) was in deficit by £726.4 billion at the end of June 2024. This compares with a £649.2 billion deficit at the end of June 2023.

The £77.2 billion reduction in PSNW ex over the last 12 months was largely because of a £141.7 billion increase in debt (PSND ex), partly offset by a £46.4 billion increase in public sector non-financial assets. 

If we exclude the public sector's £1,613.3 billion of non-financial assets, public sector net financial worth excluding public sector banks (PSNFW ex) deteriorated by £123.7 billion over the same period to a deficit of £2,339.8 billion.

Public sector net financial worth and public sector net financial liabilities are both official statistics. However, public sector net worth is currently considered an official statistic in development (previously referred to as an experimental statistic).

The data for the latest months of every release contain a degree of forecasts. Subsequently, these are replaced by improved estimates, as further data are made available, and finally by outturn data.

Tables 4 to 6 of our Public sector finances summary tables: Appendix M dataset compare our latest public sector finances data with those in our Public sector finances, UK: May 2024 release, published on 21 June 2024, and highlight the revisions to borrowing by sub-sector, with additional detail for central government receipts and expenditure.

Our Public sector finance revisions analysis: Appendix P dataset records monthly borrowing data as at first and at subsequent publications, graphically illustrating any potential bias to our early estimates.

Revisions to public sector net borrowing in the financial year to May 2024

Since publishing our May 2024 release, we have increased our estimate of borrowing (PSNB ex) in the first two months of the financial year by £1.8 billion to £35.3 billion. This change was largely the result of regular updates to our central government and local government data.

Since our last publication, we have increased our estimate of central government borrowing by £0.9 billion.

We have reduced our previous estimate of central government receipts by £0.6 billion, with a combined £1.0 billion reduction in our estimate of tax receipts and national insurance contributions being partially offset by an £0.4 billion increase to our previous estimate of interest receipts.

This change was accompanied by an increase to our estimate of total central government spending of £0.2 billion spread across several spending categories.

Central government spending data for the early part of the financial year are largely provisional. There is a degree of uncertainty around these estimates until more detailed departmental information becomes available later in the year.

Over the same period, we have increased our estimate of local government borrowing by £0.8 billion. We have improved our initial local government estimates for the UK to be based on published budget data for England, Scotland, and Wales, as is usual around this time of year.

Revisions to public sector net debt (PSND ex) at the end of May 2024

Since publishing our May 2024 release, our estimate of debt at the end of May 2024 has reduced by £16.3 billion to £2,726.6 billion.

This month, we have introduced additional monthly Bank of England (BoE) data to replace those previously sourced from annual reports as part of our ongoing data improvements. Since April 2024, the BoE have substantially increased their short-term repurchase agreements (repos) activity. Although the liabilities associated with these transactions are recorded monthly, the corresponding assets were not. This month, we have introduced a monthly source of Short-term repurchase agreements (repos) liquid assets (XLSX, 14KB), to offset the monthly liability data. As a result, our estimate of the liquid assets held by BoE at the end of May 2024 has increased by £17.2 billion, which in turn has reduced its contribution to net debt.

The effect of this improvement was partially offset by several smaller regular data updates but was the main contributing factor in the downward revision to the debt ratio at the end of May 2024 of 0.7 percentage points, from 99.8 to 99.1 percent of gross domestic product (GDP).

Revisions to gross domestic product

We have updated our previous estimate of GDP for the final quarter of the financial year ending (FYE) March 2024 with that published in our GDP quarterly national accounts, UK: January to March 2024 bulletin (28 June 2024). This month, our headline ratios remain largely unchanged, as the published GDP figure for the final quarter of the FYE 2024 was marginally more than our previous estimate.

Public sector

In the UK, the public sector consists of six sub-sectors: central government, local government, public non-financial corporations, public sector funded pensions, the Bank of England (BoE), and public financial corporations (or public sector banks). The figures presented in this release exclude public financial corporations unless otherwise noted.

Public sector current budget deficit

Public sector current budget deficit (PSCB) is the gap between current expenditure and current receipts on an accruals basis, having taken account of depreciation. The current budget is in surplus when receipts are greater than expenditure and is indicated with a negative sign.

Public sector net borrowing

Public sector net borrowing (PSNB) is the gap between total expenditure and current receipts on an accruals basis. If receipts exceed expenditure, this is referred to as a surplus and is indicated with a negative sign. Borrowing is often referred to by commentators as "the deficit".

Public sector current budget deficit and net borrowing are measured on an accruals basis, where transactions for revenue are recorded when earned and expenses are recorded when incurred, rather than when the bills are paid (on a cash basis). 

Central government net cash requirement

The central government net cash requirement (CGNCR) represents the cash needed to be raised from the financial markets over a period to finance its activities. The amount of cash required will be affected by changes in the timing of payments to and from the public sector, rather than when these liabilities were incurred.

Public sector net debt

Public sector net debt (PSND), often referred to by commentators as "the national debt", represents the amount of money the public sector owes to the private sector and overseas (in the form of loans, debt securities, deposit holdings and currency), net of liquid financial assets held. This is sometimes referred to as the “headline debt”.

Unless otherwise noted, the debt figures quoted in this bulletin exclude public sector banks (PSND ex), while the UK government's legislated fiscal target has been based on a measure that excludes both public sector banks and the Bank of England (PSND ex BoE). This is sometimes referred to as the "underlying debt".

Public sector net financial liabilities

Public sector net financial liabilities (PSNFL) is a wider measure of the balance sheet than public sector net debt and includes all financial assets and liabilities recognised in the national accounts. 

Public sector net worth

Public sector net worth (PSNW) is the widest measure of the balance sheet, broadening the PSNFL measure by considering the public sector's non-financial assets.

Comparing our data with official forecasts

The independent Office for Budget Responsibility (OBR) is responsible for the production of official forecasts for the UK government. These forecasts are usually produced twice a year, in spring and autumn. The latest forecast was published in the OBR's Economic and fiscal outlook – March 2024 report.

Each month on the same day as the Office for National Statistics (ONS) release, the OBR publishes a brief analysis of the latest public sector finances in its Monthly public finances release. Additionally, the OBR has published an article providing A brief guide to the public finances.

Bank of England

In September 2021, our Recent and upcoming changes to public sector finance statistics: August 2021 article explained improvements to our estimates of the Bank of England's contribution to our public sector measures.

In the coming months, we aim to include additional monthly data from the Bank of England which will replace further instances where published annual data are used. These more frequent data will be used to provide more precise monthly estimates of the contribution of the Bank of England to the PSF aggregates.

For more information on this development, see Section 2 of our Looking ahead – developments in public sector finance statistics article.

Methodology guides

To supplement this release, we publish an accompanying methodological guide and Quality and Methodology Information (QMI) outlining the strengths, limitations, and appropriate uses of government finance statistics.

In addition, we explain the recording of interest payable to holders of UK government gilts in the UK public sector finances in our articles: The calculation of interest payable on government gilts (8 July 2022) and The use of gross domestic product (GDP) in public sector fiscal ratio statistics (21 September 2016).

Tax receipts

In the most recent months, tax receipts recorded on an accrued basis are subject to some uncertainty. This is because many taxes such as Value Added Tax (VAT), Corporation Tax, and Pay As You Earn Income Tax contain some forecast cash receipts data and are liable to revision when actual cash receipts data are received.

The forecasts underlying our current tax estimates reflect the expectations published by the Office for Budget Responsibility (OBR) Economic and fiscal outlook – March 2024 report.

Local government and public corporations

Local government data for the financial year ending (FYE) March 2025 are provisional estimates for the UK, largely based on published budget data for England, Scotland, and Wales, with adjustments being applied as needed.

In recent years, planned local government expenditure initially reported in local authority budgets has been systematically lower than final outturn current expenditure reported in the audited accounts, and generally higher than that reported in final outturn capital expenditure. Therefore, we include adjustments to increase or decrease the amounts reported at the budget stage.

For the FYE March 2024, we include:

• a £3.0 billion upward adjustment to England's current expenditure on goods and services

• a £1.2 billion upward adjustment to England's capital expenditure

• a £0.5 billion downward adjustment to Wales's capital expenditure

• a £0.5 billion downward adjustment to Scotland's capital expenditure

We apply a further £0.9 billion downward adjustment to budget data for current expenditure on benefits in the FYE 2024, to reflect the most recently available data for housing benefits.

Data for public corporations in the FYE 2024 is largely based on the OBR's Economic and fiscal outlook – March 2024 report, supplemented by in-year estimates for train operating companies, the Housing Revenue Account and surveyed public corporations.