UK April Borrowing Hits £24.3bn, Worst Since Covid

Thursday's Office for National Statistics release placed the headline number first: April public-sector borrowing of £24.3 billion, the highest April reading since the 2020 Covid pandemic and £4.9 billion above April 2025. The composition was what alarmed the markets. Debt-interest payments hit a record £10.3 billion for the month, up £0.9 billion year-on-year; inflation-linked benefit increases and the earnings-linked state-pension rise added £2.7 billion to net social-benefit spending. ONS chief economist Grant Fitzner said higher tax receipts had been "more than offset by higher spending on benefits and other costs." Pantheon Macroeconomics' Rob Wood estimated debt-interest costs in 2026/27 will now run about £15 billion above the March Spring Statement assumption if gilt yields hold, calling out "political risk" — a clear reference to the leadership uncertainty around Prime Minister Keir Starmer — as a factor pushing UK costs above peers. The Spring Statement had given Chancellor Rachel Reeves a £23.6 billion headroom against her own fiscal rule. That buffer is now under acute pressure from both Iran-war energy effects and the gilt-market move.

The retail figures released alongside the borrowing data made the consumer side of the fiscal story visible. ONS retail-sales volumes fell 1.3 percent in April, the steepest monthly drop in nearly a year, led by a 10.2 percent collapse in motor-fuel sales — the largest single-month fall since November 2020. The agency described motorists conserving fuel after stocking up in March; clothing-store sales also weakened, partly blamed on the weather. The government on Thursday announced a series of cost-of-living measures — a VAT cut on family day-out tickets, free August bus journeys for under-16s in England, and cuts to import taxes on some basic foods — to be partly funded by tax changes for UK-based oil and gas companies. Reeves' opponents pounced: shadow chancellor Mel Stride called the £10.3 billion debt interest "the highest of any April on record"; Lib Dem Treasury spokesperson Daisy Cooper called the figures "a clear sign of this government's failure to get Britain's economy growing again"; Reform UK deputy leader Richard Tice said borrowing was "out of control." The Financial Times noted that UK gilt yields posted their biggest weekly drop since 2023 in a relief rally — a sharper-than-expected reversal from recent highs but one that has not yet relieved the medium-term debt-interest pressure.

On foreign policy, the United Kingdom joined eight other Western nations — France, Germany, Italy, Canada, Australia, New Zealand, Norway and the Netherlands — in a joint statement urging Israel to halt the expansion of West Bank settlements and address settler violence. The statement called the settlements a "breach of international law" and specifically warned businesses against bidding on construction tenders for the E1 settlement project, which would bisect the West Bank, while demanding accountability for settler violence and an end to Israel's financial restrictions on the Palestinian Authority.

Two judicial threads added domestic weight. Thames Valley Police confirmed it has expanded its investigation into Andrew Mountbatten-Windsor — formerly Prince Andrew, arrested on 19 February and released under investigation — to include allegations of sexual misconduct alongside the existing probe into potential misconduct in public office. The force has contacted the lawyer of a woman whom a BBC report says was sent by Jeffrey Epstein to have a sexual encounter with Mountbatten-Windsor; he denies wrongdoing. Separately, the Attorney General's office is reviewing the sentences given to three teenage boys, aged 14 and 15, who received youth rehabilitation orders rather than custodial sentences despite 11 rape convictions for separate attacks on two girls in Fordingbridge, Hampshire, between 2024 and 2025. In Norwich, seven Afghan nationals aged 20-21 were charged with 40 offences including rape and conspiracy to rape in a group-exploitation case involving two teenage girls between August 2023 and May 2025; an eighth man was arrested in Ireland and all seven UK-charged men remain in custody.