The government borrowed more than expected at the start of the 2023-24 financial year as rising benefit payments, the additional costs of the energy support schemes levels and higher debt interest pushed up public spending.
Figures from the Office for National Statistics showed public sector net borrowing stood at £25.6bn in April, higher than the Office for Budget Responsibility’s estimate of £22.4bn and £11.9bn more than a year earlier.
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It was the second-highest April borrowing since monthly records began in 1993, the ONS said.
Central government debt interest payable was £9.8bn in April, £3.1bn more than April 2022 and the highest April figure since monthly records began in 1997.
Social security benefits payments in April were £25.4bn, £4.5bn than in April 2022, reflecting the 10.1% rise in benefit levels in April.
Energy support payments of £3.9bn in April were £1.8bn more than in the April 2022.
Despite the higher-than-expected figure Samuel Tombs at Pantheon Macroeconomics feels the OBR’s forecast for public borrowing of £131.6bn in 2023/24 as a whole likely "is still in the right ballpark," given that both GDP and interest payments look set to surprise the OBR’s assumptions to the upside, to offsetting degrees.
However, Tombs doubted that public borrowing will fall to the low levels in the medium term predicted by the OBR last month.
"The OBR is too upbeat about the economy’s medium-term economic outlook," he reckons.