September deficit above forecast

The UK government borrowed £24.5bn in September, a higher figure than expected, as rising inflation pushed up the interest paid on government debt, according to the Treasury's monthly figures.

The public sector net borrowing total compares with earlier months and official forecasts as follows:

• Up from £17bn in August
• £1.9bn higher than the independent Office for Budget Responsibility had forecast
• Financial-year-to-date borrowing of £97.8bn, £4.4bn lower than last year but £6bn above the OBR's expectation

Debt interest hits record for September

Debt interest costs reached £10.9bn in September, the highest September figure since records began and only the eighth time a monthly figure has exceeded £10bn.

The Office for National Statistics said inflation-linked bonds alone added £4bn to the bill. Some government bonds are directly linked to the retail prices index measure of inflation, with payments rising in line with it - and RPI has increased in recent months as the Iran war has pushed up energy costs.

National debt estimated at £3tn

Total national debt is estimated to have hit £3tn for the first time. As a share of the size of the economy it has fallen to 94%, from 95% a year ago.

Higher inflation tends to be good for tax revenues, but it also squeezes how much government departments can achieve within fixed budgets.

Pressure before Wednesday's budget

The figures increase pressure on Chancellor John Healey before his first budget next Wednesday. Healey has been keen to stress his determination to stay within the fiscal rules set out by his predecessor as chancellor, Rachel Reeves.

He is widely expected to accept a slimmer financial buffer, or "headroom", against those rules than the £24bn Reeves had built up at her spring forecast.