The UK government started the 2025/26 financial year by borrowing more than expected in April. This signals ongoing pressure on public finances and challenges for Finance Minister Rachel Reeves ahead of a major spending review.
According to the Office for National Statistics (ONS), public sector net borrowing reached £20.155 billion ($27 billion) in April. This figure is higher than the £17.9 billion median forecast from a recent Reuters poll of economists.
Economists have consistently underestimated Britain’s budget deficit each month over the past year. Reeves is set to present her first multi-year spending review on June 11, which will outline budgets for public services.
The ONS also revised its estimate for borrowing in the last financial year, which ended in March. The deficit was lowered to £148.3 billion from a previous estimate of £151.9 billion. This represents 5.1% of the UK’s economic output, down from 5.3%. For comparison, the deficit in 2023/24 was 4.8% of GDP.
In March, the Office for Budget Responsibility (OBR), which provides the government with fiscal forecasts, projected a budget deficit of £137.3 billion for the financial year ending in March.
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