Government borrowing rose to its highest September level in five years, underlining the fiscal challenge facing the Chancellor Rachel Reeves MP before next month’s Budget. The Office for National Statistics (ONS) said public sector borrowing reached £20.2 billion last month, £1.6 billion higher than a year earlier. The rise came despite stronger tax and national insurance receipts, as higher debt interest payments offset gains in revenue. September’s total was slightly below economists’ expectations of £20.8 billion but marginally above the Office for Budget Responsibility’s forecast. Borrowing over the first half of the financial year now stands at £99.8 billion, the second-highest since records began in 1993, surpassed only in 2020. Despite the fiscal strain, borrowing costs have eased slightly. Yields on 10-year UK government bonds have fallen to around 4.5%, down from 4.8% in August. The Chancellor is expected to announce growth measures in the upcoming budget, including reforms to cut red tape that could save businesses up to £6 billion a year. Public sector debt is now estimated at 95.3% of GDP, a level not seen since the early 1960s. Chief Secretary to the Treasury James Murray said the Government would remain “responsible” with public finances, but opposition parties accused Reeves of losing control of borrowing.