UK government borrowing significantly exceeded expectations in February, according to official data, intensifying the pressure on chancellor Rachel Reeves as she prepares for her spring statement next week.
In February, the government borrowed £10.7bn, marking the fourth-highest February figure since records began in 1993, according to the Office for National Statistics (ONS). This was well above the City’s forecast, which had anticipated borrowing of around £7bn.
For the financial year to February, borrowing totalled £132.2bn, a rise of £14.7bn compared to the same period in the previous year. In October, the Office for Budget Responsibility (OBR) had projected that public sector borrowing would reach £127.5bn for the entire financial year, which ends in March. An updated OBR forecast is expected to be published during her spring statement on Wednesday.
Jessica Barnaby, deputy director for public sector finances at the ONS, said: “At £10.7bn, 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 £15bn on the equivalent period last year.”
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.
Overall spending on public services increased compared with the same month last year, with things like social benefits and investment spending more than had been forecast, the ONS said.
Reeves is set to use the spring statement to announce further cuts to government spending in an effort to maintain fiscal discipline. Under her fiscal rules, the chancellor has committed to balancing the current budget, which excludes government investment, by 2029-30.