The Treasury overshot its borrowing forecasts by £14.6bn final yr, official figures confirmed, because the Worldwide Financial Fund (IMF) delivered a blow to Rachel Reeves by slicing its progress projections for Britain.
Public sector borrowing, excluding banks, hit £151.9bn within the yr to March, in response to the Workplace for Nationwide Statistics (ONS).
It was properly forward of projections made simply final month by the Workplace for Funds Duty (OBR) that Treasury borrowing would hit £137.3bn for the 2024/25 monetary yr.
It additionally surpassed by £24.4bn the OBR’s forecast on the October Funds for borrowing of £127.5bn.
Public sector borrowing was £20.7bn increased than the earlier yr, the ONS stated, and the third highest on file.
Grant Fitzner, the ONS’s chief economist, stated: “Our preliminary estimates recommend public sector borrowing rose virtually £21bn within the monetary yr simply ended as, regardless of a considerable increase in revenue, expenditure rose by extra, largely as a result of inflation-related prices, together with increased pay and profit will increase.
“On the finish of the monetary yr, debt remained near the annual worth of the output of the financial system, at ranges final seen within the early Nineteen Sixties.”
It comes because the Chancellor faces a larger problem to stability the general public funds following a downgrade in progress projections for Britain by the IMF.
The UK is now anticipated to develop by 1.1pc this yr and 1.4pc in 2026, down from projections of 1.6pc and 1.5pc simply three months in the past.
Whereas the Fund stated the influence of current tariff bulletins would weigh on progress, it stated that “a rise in gilt yields, and weaker personal consumption amid increased inflation because of regulated costs and power prices” for the choice to chop its UK progress forecasts.
The Chancellor is in Washington this week the place she has vowed to “defend British pursuits” in conferences.
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