The UK's budget deficit in February surpassed economists' predictions, despite a rise in revenues, according to official figures released on Thursday.
Net borrowing in the public sector, excluding public sector banks, was down by £3.4 billion compared to the same month of the previous year, totalling £8.4 billion. This figure was notably higher than the economist forecast of £5.95 billion.
On a fiscal year-to-date basis up to February, borrowing reached a total of £106.8 billion; this was £4.6 billion less than in the same eleven-month period of the previous year.
The Office for Budget Responsibility projected borrowing to settle at £114.1 billion for the entire financial year ending in March 2024.
Ruth Gregory, an economist at Capital Economics, pointed out that this implies that borrowing in March would have to be reduced to just £7.2 billion to meet the forecast, a goal that seems doubtful. Despite these less than encouraging figures, Gregory suggests that it probably won't deter the Chancellor from introducing further tax cuts.
Central government receipts in February were £7.2 billion higher than the previous year at £86.4 billion. However, spending also increased by £2.9 billion to £89.6 billion.
The payable interest on central government debt was the lowest since February 2022, amounting to £6.8 billion.
By the end of February, the public sector net debt, excluding banks, had risen by £157.4 billion to £2,659.4 billion.
Government debt was estimated to be around 97.1% GDP, which is approximately 2.3 percentage points greater than the value at the end of February 2023.
