Families face £20billion tax sting as Government borrowing soars to second highest May level on record
TAX YIKES Families face £20billion tax sting as Government borrowing soars to second highest May level on record
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FAMILIES face a £20billion tax hit after Government borrowing jumped last month, experts warned.
The second highest figure on record for May, beaten only during the pandemic, saw borrowing surge to £17.7 billion, higher than forecast by the independent watchdog.
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Receipts for the Treasury were up to £82 billion due to higher income tax and the NI increase that kicked in from April.
But with sluggish growth and the high borrowing costs could mean Rachel Reeves could lose her £10 billion financial cushion by the Budget.
Thomas Pugh, economist at RSM UK, said the Chancellor may have to raise taxes between £10-£20 billion.
He added: 'The under-performance of the economy and higher borrowing costs mean the Chancellor may already have lost the £9.9bn of fiscal headroom that she clawed back in March.'
Shadow Chancellor, Sir Mel Stride said: 'Labour is spending recklessly, with no plan to pay for it.
"Debt interest now costs us £100bn a year - that's almost twice the defence budget.
'Having turned on the spending taps, Labour have left themselves with only one option and that's to put up your taxes.
Treasury Minister Darren Jones insisted the government had 'stabilised the economy and the public finances'.
Growth forecast SLASHED in Spring Statement - sparking fears of MORE tax rises
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