Official figures show that government borrowing was higher than expected in the last financial year. The data, released by the Office for National Statistics, revealed that borrowing reached £120.7bn in the year to March, £6.6bn more than the government had predicted. While the figure was lower than the previous year’s, the development could make a further tax cut prior to a general election less feasible. A pre-election Budget and another tax cut before polling day have been speculated upon.
The Office for Budget Responsibility had forecast that borrowing for the year would be £114.1bn. However, despite the higher-than-projected figure, Rob Wood, chief UK economist at Pantheon Macroeconomics, stated that he still expected the chancellor to cut taxes again prior to an election. Analysts noted that the next government would face a difficult choice about whether or not to raise taxes to deal with the strains on public services.
The borrowing figures show that debt at the end of March amounted to £2.7tn, or 98.3% of the UK’s gross domestic product (GDP). This is the greatest total for debt for more than half a century. The Office for National Statistics has said that the borrowing estimates remain provisional and additional figures will be issued in the coming months.
Commenting on the figures, a spokesperson for the Treasury said that the increase in debt had arisen as a result of government efforts to safeguard jobs throughout the pandemic. Critics, however, accuse Conservative governments of inconsistencies and failures of economic credibility
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