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5d ago

UK Public Borrowing Hits £151.9 Billion, Exceeding Forecasts by £14.6 Billion

Inflation-driven costs push borrowing to its third-highest annual level, intensifying scrutiny on Chancellor Reeves during key Washington meetings.

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Rachel Reeves has promised to stick to tight borrowing rules (Photo: Reuters)

Overview

  • The UK public sector borrowed £151.9 billion in the financial year ending March 2025, £14.6 billion higher than the Office for Budget Responsibility's forecast.
  • This marks the third-highest annual borrowing since 1947, surpassed only by figures from the Covid-19 pandemic in 2021 and the 2010 financial crisis.
  • March borrowing reached £16.4 billion, the third-highest for that month on record, driven by inflation-related expenses such as higher pay and benefits.
  • ONS Chief Economist Grant Fitzner attributed the borrowing increase to inflationary pressures, noting that debt remains close to the annual output of the economy.
  • The borrowing data coincides with a downgrade of UK growth projections by the IMF, adding political pressure on Chancellor Rachel Reeves during her Washington visit for trade and economic discussions.