UK growth forecast upgraded by IMF; Bank of England governor says inflation has ‘turned the corner’ – business live

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Britain borrowed more than £25bn to balance the books last month, the second-highest borrowing for an April ever, and more than expected.

Soaring inflation and the cost of capping energy bills drove up borrowing again, the latest figures from the Office for National Statistics show.

Borrowing hit £25.6bn last month, which is £11.9bn higher than in April 2022, and the second highest since monthly records began in 1993 (behind April 2020, when the pandemic hit the economy).

Economists polled by Reuters had predicted that public sector net borrowing, excluding the impact of state-owned bank, would have hit £19.75bn in April.

Although public sector receipts rose by £900m in April compared with March, that was dwarfed by a £12.8bn rise in public sector spending.

High inflation continued to drive up the cost of the national debt, as many government bonds are pegged to the rising cost of living.

The interest payable on central government debt jumped to £9.8bn in April, a jump of £3.1bn compared with April 2022. Thas was due to the increase in the RPI measure of inflation.

The ONS explains:

Rises in the Retail Prices Index have increased the interest payable on index-linked gilts. This represents the third-highest interest payable in any month on record, behind the £20.0bn in June 2022 and the £18.0bn in December 2022.

© Provided by The Guardian A chart showing interest rates on UK gilts

The UK’s energy support packages meant central government spent £3.9bn on subsidies, £1.8bn more than in the April 2022.

Most of that increase was due to the cost of the Energy Price Guarantee for households and the Energy Bills Discount Scheme.

Also coming up today

The UK economy, and its policymakers, are in the spotlight today.

A team from the International Monetary Fund are in London to give their annual healthcheck on Britain’s economy.

The IMF will give its verdict after meetings with the Bank of England, the Treasury, independent watchdogs at the Office for Budget Responsibility and the Financial Conduct Authority.

Last month the IMF forecast that UK GDP would shrink by 0.3% this year, the weakest of all major industrialised countries.

Related: UK economy expected to shrink this year, says IMF

But chancellor Jeremy Hunt has vowed to beat these forecasts, and earlier this month the Bank of England upgraded its own estimates due to a brightening economic outlook.

Hunt, and IMF managing director Kristalina Georgieva, will hold a press conference to discuss the report this morning, from 11.15am.

MPs on the Treasury Committee will quiz top officials from the Bank of England this morning too.

The Governor of the Bank of England, Andrew Bailey, chief economist Huw Pill, and Monetary Policy Committee members Catherine Mann and Silvana Tenreyro will be questioned about this month’s interest rate rise to 4.5%, the highest since 2008.

Related: Bank of England raises UK interest rates to 4.5%

Huw Pill’s recent comment that British households and businesses “need to accept” they are poorer may come up too….

Related: Britons ‘need to accept’ they’re poorer, says Bank of England economist

The agenda