Official figures reveal that the government borrowed £6.6 billion more than anticipated in the past year, raising doubts about Jeremy Hunt's ability to implement significant tax cuts ahead of an expected general election this year.
The UK deficit hit £11.9 billion in March, down by £4.7 billion from the same month last year and up from £9.5 billion in February this year, according to the Office for National Statistics (ONS).
March’s borrowing figure was above City analysts’ expectations of £10.3 billion. Governments borrow money from investors when their tax revenues do not cover their spending.
The ONS's financial borrowing estimate for the fiscal year 2023-24 was £120.7 billion, surpassing the £114.1 billion projection by the Office for Budget Responsibility in March. This highlights the limited scope for the chancellor to reduce taxes without further straining public finances.
According to the ONS, the debt-to-GDP ratio stood at 98.3 per cent, marking a 2.6 percentage point increase from the previous year. This rise has been driven by heightened government spending to address the repercussions of the 2008 financial crisis, the pandemic, and the energy price shock.
