The Government's borrowing for the year ending March 2024 was £120.7bn, according to the Office for National Statistics (ONS). This figure is lower than last year's but still £6.6bn more than the forecast by the Government's independent forecaster, the Office for Budget Responsibility (OBR), which had predicted £114.1bn.
The unexpected increase in borrowing may restrict the possibility of tax cuts before the next general election, scheduled before January 2025.
Chancellor Jeremy Hunt previously lowered National Insurance (NI) by 2p in the Spring Budget, following a similar cut last autumn.
The OBR estimates that each of these cuts costs the government nearly £10bn. In March alone, the UK borrowed £11.9bn, £4.7bn less than the same month last year but still above expectations. Total government debt reached £2.7 trillion at the end of March, equating to 98.3% of the UK's GDP.
The ONS noted that this debt ratio is the highest it has been since the early 1960s. These figures are preliminary and may be revised in the coming months.
A Treasury spokesman said:
"Debt increased in recent years because we rightly protected millions of jobs during Covid and paid half of people's energy bills after Putin's invasion of Ukraine sent bills skyrocketing."
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