Chancellor Rachel Reeves faces a fresh headache ahead of her first Budget this autumn after official figures revealed government borrowing jumped by more than expected last month.

Borrowing rose to £13.7 billion last month, marking the third highest August on record, driven by higher spending on public services due to increased running costs and pay increases.

The increase means public sector debt hit 100% of gross domestic product (GDP) at the end of August 2024.

The figure, which excludes public sector banks, means national debt is at levels last seen in the early 1960s, the Office for National Statistics (ONS) said.

Talk’s Alex Phillips is joined by former Conservative Party leader Iain Duncan Smith, who says he “doesn’t believe for one moment” there was a £22 billion ‘black hole’ left by the Tories.

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