UK Government borrowing overshoots forecasts ahead of spring statement

UK Government borrowing soared above forecasts last month as public sector spending rose, putting pressure on Chancellor Rachel Reeves ahead of her spring statement.

The Office for National Statistics (ONS) said public sector net borrowing was £10.7 billion in February.

This was £100 million more than the same month last year and the fourth-highest February on record.

It was also £4.2 billion more than had been forecast by the Government’s official forecaster, the Office for Budget Responsibility (OBR), and more than some economists had been expecting.

The borrowing figure refers to the difference between what the Government spends on the public sector and what it receives in income from tax and other receipts.

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Spending

Overall central government spending totalled £93 billion in February, £3.8 billion more than the same month last year, when the Conservative government was in power.

Things like social benefits and investment spending was more than the OBR had projected, leading to the higher-than-forecast February figure, the ONS said.

Meanwhile, central government receipts – the amount of money it receives, predominantly through taxes – rose by £3.2 billion to £87.7 billion for the month.

The figures come less than a week before Ms Reeves will lay out her tax and spending plans in the Government’s spring statement.

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New forecasts

Ms Reeves is not expected to make tax changes when she delivers the statement next Wednesday but she will be responding to new forecasts from the OBR.

It comes against a backdrop of tighter headroom when it comes to the fiscal rules she set herself in October.

Jessica Barnaby, the ONS’s deputy director for public sector finances, said: “At £10.7 billion, public sector borrowing in the month of February was virtually unchanged on the same month last year.

“However, borrowing over the financial year to date was up nearly £15 billion on the equivalent period last year.”

Darren Jones, Chief Secretary to the Treasury, said the Government was “going through every penny of taxpayer money line by line to make sure it is helping us secure Britain’s future through the plan for change”.

“At the core of this urgent mission is sound public finances, based on our non-negotiable fiscal rules.

“This Government will never play fast and loose with the public finances.”