UK’s public borrowing has exceeded official forecasts by almost £15 billion in the last financial year, putting pressure on Chancellor Rachel Reeves to raise taxes or announce deeper cuts to public spending.
Gatekeepers News reports that according to the Office for National Statistics (ONS), borrowing in the financial year ending in March was £151.9 billion, £14.6 billion more than predicted by the Office for Budget Responsibility (OBR).
Economists warn that Reeves may be forced to increase taxes or cut public spending further in the autumn budget to maintain her self-imposed fiscal rules.
“Public borrowing was overshooting the OBR’s forecast even before the influence from the tariff chaos is felt,” said Ruth Gregory, deputy chief UK economist at Capital Economics.
“This raises the chances that if the chancellor wishes to stick to her fiscal rules, more tax hikes in the autumn budget will be required.”
The OBR warned that the worst-case scenario could reduce UK GDP by as much as 1% and erase Reeves’s headroom.
Separate figures showed business activity fell in April at the fastest rate since November 2022, amid Trump’s trade wars threatening to push the British economy into a renewed downturn.
Darren Jones, the chief secretary to the Treasury, said the government remains committed to the chancellor’s “non-negotiable” fiscal rules and is working to “tear out waste” from public spending before the spending review in June.
