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UK Government Borrowing Exceeds Expectations
Recent data reveals that UK government borrowing has notably surpassed projections for February, placing added pressure on Chancellor Rachel Reeves ahead of her forthcoming spring statement.
In February, government borrowing reached £10.7 billion, constituting the fourth-highest borrowing figure for that month since the records began in 1993, as reported by the Office for National Statistics (ONS). This borrowing amount significantly exceeded the anticipated £7 billion forecast by financial analysts.
For the fiscal year up to February, total borrowing has hit £132.2 billion, reflecting an increase of £14.7 billion compared to the same timeframe last year. The Office for Budget Responsibility (OBR) had previously estimated that overall public sector borrowing would total £127.5 billion by the conclusion of the financial year in March. An updated forecast from the OBR is anticipated to be announced during the spring statement on Wednesday.
Jessica Barnaby, the deputy director for public sector finances at the ONS, commented on the situation: “Public sector borrowing in February stood at £10.7 billion, showing little change from the same month last year. However, the cumulative borrowing for the financial year to date has risen by nearly £15 billion compared to the equivalent period last year.”
This borrowing figure represents the shortfall between government expenditures on public services and the income derived from taxes and other financial sources.
The ONS highlighted that overall spending on public services has escalated compared to the equivalent month a year earlier, particularly citing increases in social benefits and investment costs that surpassed initial forecasts.
In response to these figures, Reeves is expected to utilize her spring statement to propose additional cuts to government spending as a means to uphold fiscal discipline. She aims to adhere to her fiscal strategy, which includes a commitment to balancing the current budget—exclusive of government investments—by the fiscal year 2029-30.
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uk.finance.yahoo.com