Overall public sector net borrowing (PSNB) was £24.74 billion in April, up from a smaller revised £20.02 billion in March and, more significantly, some £11.86 billion more than a year ago. This was the second-highest borrowing for the month since records began in 1993 and largely reflected the additional costs of the energy support schemes, increases in benefit payments and higher debt interest payable. Excluding public sector banks (PSNB-X), the shortfall stood at £25.56 billion versus £20.84 billion in March and £13.70 billion in April 2022.

Of note, central government debt interest was £9.8 billion last month, some £3.1 billion more than a year ago and also a new all-time high. Public sector net debt was £2,536.9 billion or around 99.2 percent of GDP, the debt-to-GDP ratio being at a level not seen since the early 1960s.

Borrowing in April was disappointingly high but the downward revision to March puts the FY2022/23 PSND-X at £137.1 billion, now £15.3 billion less than the £152.4 billion forecast by the Office for Budget Responsibility (OBR). As such, the government still has some wiggle room left as it contemplates possible tax changes ahead of a probable general election next year.

The public sector net borrowing requirement (PSNB) is the difference between the sector's receipts and expenditure and so provides a simple measure of government fiscal policy. In response to the global economic crisis in 2008/09 the UK government introduced a number of measures designed to show the underlying state of public sector finances by omitting temporary distortions caused by financial interventions. It bases its fiscal policy on these measures. To this end, the underlying gauge of government borrowing watched most closely by financial markets is the PSNB-X which takes overall net borrowing (PSNB) but excludes public sector banks.

Changes in public sector finances can be used to determine the thrust of the government's fiscal policy. Generally speaking when the government has a rising deficit (or falling surplus) it is loosening its fiscal stance with a view to boosting economic activity. When its deficit is falling (or surplus rising), fiscal policy is being tightened in order to slow economic growth. However, sometimes changes in government financial positions can be due to factors outside of the government's control and do not signal an explicit shift in policy. This means that great care is needed in interpreting the data.