Government borrowing over the last financial year came in higher than expected, official figures showed on Tuesday.
At £120.7 billion, the figure was £7.6 billion less than in 2022-23, but £6.6 billion more than forecast, according to figures from the Office for National Statistics.
“Increased spending on public services and benefits [outstripped] large reductions in interest payable and energy support scheme costs,” ONS’ Jessica Barnaby commented.
This came as borrowing fell from £16.6 billion to £11.9 billion year on year in March, against expectations for £10 billion.
EY ITEM Club analysts noted the higher-than-anticipated figures left Chancellor Jeremy Hunt with minimal room for maneuver ahead of the UK’s looming general election.
Batting off speculation of further cuts to national insurance, analysts said Hunt had been left with “a very narrow margin for error” after giveaways in the Spring Budget.
“EY ITEM Club calculates that more than half of that already-small leeway has been lost to higher debt servicing costs.”
Future fiscal policy is likely to be managed tightly as a result, analysts continued, including through higher tax revenues and reduced spending.