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The British government borrowing expectations of surpassing in March and during the full financial year, in a reverse for Chancellor Rachel Reeves while the economy is faced with the impact of Donald Trump's prices.
The deficit between government income and expenses was 16.4 billion pounds Sterling last month and 151.9 billion pounds sterling in 12 months to March, the National Statistics Office said Wednesday.
This is compared to a deficit of 16 billion pounds sterling expected by economists in March. The full -year figure was 20.7 billion pounds more than in the same period of 12 months a year earlier and 14.6 billion sterling pounds of more than 137.3 billion pounds sterling by the Budget liability officethe government's tax guard dog. It was also the third highest level of borrowing recorded for a full exercise.
The current budget deficit, which reflects the loan to finance daily public sector activities, was 74.6 billion pounds Sterling in 2024-25, greater than 13.9 billion sterling pounds that OBR forecasts only a month ago, according to ONS data. The self-imposed rule of Reeves is that daily expenses must be covered by income by the year 2029-30.
Worse than expected, public finances, associated with higher borrowing costs and the deterioration of economic growth prospects, have added to concerns that the Chancellor will have to increase taxes in the fall to comply with his tax rules.
Ruth Gregory, Capital Economics consultation economist, said that the figures “showed that the public loan exceeded OBR forecasts even before the influence of tariff chaos is done”.
She added: “This increases the chances that if the Chancellor wishes to stick to his tax rules, more tax increases in the fall budget will be necessary.”
The figures come while Reeves should attend the annual IMF and the World Bank in Washington meetings.
Tuesday, the IMF Reduce its growth forecasts in 2025 for the United Kingdom At 1.1%, down compared to its previous estimate of 1.6%, warning of a generalized economic disturbance of trade tensions. It reduced its global growth forecasts by 0.5 percentage point to 2.8%, partly on the economic benefits of American prices,
Like many other countries, Great Britain has been struck by Trump priceswhich include 10% of the tasks between boarding and higher levels on steel and cars.
Darren Jones, chief secretary of the Treasury, said that the government “crossed taxpayer money spent every penny, line by line, for the first time in 17 years to eliminate waste”.
“We are focused on the laser to ensure that taxpayers' money offers our plan to modify missions to put more money in people's pockets, rebuild the NHS and strengthen our borders.”
The OBR warned last month that, despite the recent well -being cuts, the government's “tax room” – or the budgetary room for maneuver – has been historically small at 9.9 billion pounds sterling.
Mel Stride, Chancellor of the Shadow, accused Reeves of “playing the tax rules” and increasing the loan by 30 billion pounds sterling per year.
“These attractive sums are paid by workers by higher taxes, higher prices and higher mortgage rates. ''
The ONS said that public sector spending in 12 months to March increased by 56.8 billion pounds sterling compared to the previous financial year, with higher spending on public services, benefits and debt. Interest payable on central government debt increased by 2.1 billion pounds sterling to 85 billion pounds sterling, largely because interest payable on the native loss to the index increase and decrease with the retail price index.
Public sector receipts have increased by 36 billion pounds Sterling, the growth of tax revenues from the central government is partially offset by the reductions in national insurance contributions.
The chief economist of the ONS, Grant Fitzner, said that the initial estimates of the guard dog suggest that, despite a “substantial” increase in income, the loan from the public sector increased by almost 21 billion pounds in the exercise, “largely due to the costs linked to inflation, including increases in remuneration and higher services”.
At the end of March, he said, “debt remained close to the annual value of the production of the economy, at levels for the last time in the early 1960s”.
Additional George Parker report in London
