Overview

• Official data show public sector net borrowing reached £20.7bn in June, £6.6bn more than a year earlier and the highest June deficit outside the pandemic.
• Interest payments on central government debt rose to £16.4bn, driven by RPI-linked gilt costs, and outstripped increased tax and national insurance receipts.
• Spring Statement headroom of £9.9bn has turned into an estimated fiscal gap of about £30bn that must be closed to meet the Chancellor’s self-imposed rules.
• Treasury advisers are considering measures such as a 2% levy on assets above £10m, cutting higher-rate pension tax relief from 40% to 20%, and extending the income tax threshold freeze.
• Backbench Labour MPs, unions and Neil Kinnock have intensified calls for a wealth tax, while business groups warn of capital flight risks and pension industry experts caution against raids on retirement savings.