UK government borrowing fell by almost £20bn in the year ending March, according to official figures from the Office for National Statistics (ONS). The total borrowing of £132bn was slightly below the £132.7bn forecasted by the Office for Budget Responsibility (OBR), marking a significant reduction from the previous year's £151.9bn.
Key Takeaways
UK government borrowing fell by £20bn in the year to March, according to official figures. This brings borrowing down to 4.3% of GDP, the lowest since before the Covid pandemic.
- UK government borrowing dropped by nearly £20bn last fiscal year
- Borrowing totaled £132bn, slightly below OBR's forecast of £132.7bn
- March borrowing was £12.6bn, down from previous years and lower than expected
- Debt interest spending rose to 97.6 billion pounds, the second-highest since 2022/23
The ONS reported that borrowing in March alone was £12.6bn, which is £1.4bn less than the same period last year and the lowest March borrowing since 2022. This reduction brought the annual borrowing down to 4.3% of GDP, the lowest level since before the Covid pandemic.
The ONS senior statistician, Tom Davis, noted that although spending had risen this financial year, it was offset by increased receipts. The Guardian highlighted that while the UK undershot its annual borrowing target by £700m, potential economic impacts from the Iran war could jeopardize Chancellor Rachel Reeves' fiscal plans.
Reuters reported that debt interest spending in 2025/26 rose to £97.6bn, up from £85.4bn a year earlier and marking the second-highest figure since 2022/23 when inflation soared following Russia's invasion of Ukraine. Economists had forecasted a March deficit of £10.3bn, but the actual borrowing was lower at £12.6bn.
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