UK government borrowing higher than forecast

Government borrowing was higher than forecast in the last financial year, according to official figures.

Borrowing – the difference between spending and tax income – reached £120.7bn in the year to March, the Office for National Statistics said.

While it is lower than the previous year, it was £6.6bn more than the government’s forecaster predicted.

The higher-than-expected figure could limit a further pre-election tax cut, analysts said.

“If the chancellor was hoping March’s figures would provide more scope for tax cuts at a fiscal event later this year, he will have been disappointed,” said Ruth Gregory, deputy chief UK economist at Capital Economics.

Jessica Barnaby, ONS deputy director for public sector finances, said that over the past year government spending was up by about £58bn “with increased spending on public services and benefits outstripping large reductions in interest payable and energy support scheme costs”.

“But with public sector income up £66bn, overall, the deficit still fell,” she said.

Borrowing in March alone was £11.9bn, which was £4.7bn less than a year earlier but still higher than analysts had expected.

Total debt – which is the overall amount of money owed by the government that has built up over years – was £2.7 trillion at the end of March.

That is the equivalent of 98.3% of the size of the UK’s economy as measured by gross domestic product (GDP), remaining at levels last seen in the early 1960s, the ONS said.