The UK government’s public sector borrowing fell sharply in June, easing some early financial pressure on new Chancellor John Healey, according to official data released on Wednesday. Public sector net borrowing, which measures the amount the government needs to borrow to cover its spending shortfall, stood at £16 billion last month. This figure represents a 33.1 percent decline compared to June 2025 and was significantly lower than economists and official forecasts had anticipated.

The Office for National Statistics reported that borrowing in June was £300 million below the projection made by the Office for Budget Responsibility and £2 billion less than most economists had expected. The primary driver of the decline was a reduction in inflation-linked debt interest payments compared with the previous year.

Healey, who took office as Chancellor on Wednesday, described fiscal discipline as his “first duty” and emphasized the importance of maintaining “fiscal credibility” as foundational to economic stability and national security. He highlighted discussions with Prime Minister Rishi Sunak about strict adherence to fiscal rules, including the creation of a financial buffer to manage uncertainty. Healey also underscored a commitment to making life more affordable for working people across the United Kingdom.

The announcement comes amid recent government efforts to ease the cost-of-living pressures, including a cut in Value Added Tax (VAT) on certain goods and services. However, personal finance expert Martin Lewis expressed skepticism about the VAT reduction’s practical impact on household budgets. While acknowledging it as a positive symbolic step, Lewis suggested that the measure would offer limited tangible benefit to consumers.

The sharp drop in borrowing marks a positive start for Healey’s tenure, though fiscal experts have cautioned that sustaining lower borrowing levels will depend on a combination of economic growth, inflation trends, and government spending decisions in the coming months.