THE Labour Government borrowed almost £15 billion more than forecast in the last financial year, according to official figures.
The Office for National Statistics (ONS) reported that borrowing - the difference between total public sector spending and income - over the 12 months to the end of March came in at £151.9bn.
That provisional sum was £20.7bn more than in the same twelve-month period a year earlier and £14.6bn more than the £137.3bn forecast by the Office for Budget Responsibility (OBR) at the recent Spring Statement.
The ONS added that the figure represented 5.3% of the UK's gross domestic product (GDP), 0.5 percentage points more than in 2023/24.
It was partly driven by £16.4bn of borrowing in March - the third-highest March borrowing since monthly records began in 1993, behind only the 2021 financial year, during the peak of the Covid pandemic, and the 2010 financial year, following the global crisis.
The latest figures put increasing pressure on public finances as US president Donald Trump’s tariffs pose a threat to economic growth.
The figures reflect the period shortly before Trump unveiled a range of tariffs on US imports which heightened global trade tensions and are expected to limit economic growth around the world.
On Tuesday, the International Monetary Fund (IMF) lowered its growth outlook for the UK by 0.5 percentage points this year, and cut the US’s growth projections by 0.9 percentage points.
The UK’s downgrade partly reflected tariffs, but also weaker consumption amid higher inflation which has been driven by bills and energy price hikes.
Matt Swannell, chief economic adviser to the EY Item Club, said: “Having ended the year on a poor footing, recent US tariffs are only going to make the UK fiscal arithmetic more challenging.”
He said that Chancellor Rachel Reeves’ recent Spring Statement “only left a slim margin for error against the fiscal rules”, which limit the Government’s ability to borrow to fund day-to-day spending.
“Most of this will likely be used up as the combination of reduced access to a major export market, a weaker global economy, and lingering uncertainty is set to hold back growth,” Swannell said.
Elliott Jordan-Doak, senior economist for Pantheon Macroeconomics, agreed that “fracturing global trade and geopolitical uncertainties are going to make the Chancellor’s life even more difficult”.
Trump’s sweeping tariffs on US imports are expected to impact UK economic growth, “which will further weigh on the public finances”, he warned.
He added: “The public finances were already in a difficult position heading into the trade war, and we think both taxes and borrowing will need to be raised in the October budget.”
Chief Secretary to the Treasury Darren Jones stressed that the Government “will never play fast and loose with the public finances”.
“We are laser-focused on making sure taxpayer money is delivering our plan for change missions to put more money in people’s pockets, rebuild the NHS and strengthen our borders,” he said.
