Government borrowing came in higher than expected in February, adding pressure on Chancellor Rachel Reeves ahead of her Spring Statement next week.
The UK borrowed £10.7bn last month, well above the £6.5bn forecast by the Office for Budget Responsibility.
The figures increase the risk that Reeves will miss her own fiscal rules, including cutting debt as a share of economic output by 2029/30.
Economists now expect her to unveil deeper spending cuts, on top of recent welfare reforms. These include stricter disability assessments and a freeze on incapacity benefits until the end of the decade.
Although February’s numbers won’t directly affect next week’s statement, analysts say they highlight how little room Reeves has to manoeuvre. The Treasury insists the rules are “non-negotiable” and aims to create a more efficient state.
Meanwhile, defence spending is set to rise, though the money will be redirected from the UK’s international aid budget.