UK Borrowing Surges Nearly £15B Above Forecasts

UK government borrowing for the fiscal year ending in March reached £151.9 billion, substantially exceeding both official forecasts and the previous year's figure, and marking the third-highest annual borrowing since records began. The Office for National Statistics attributed this rise to increased expenditure outpacing a boost in tax receipts, with inflation-linked costs such as higher pay, benefits, and debt interest payments driving much of the increase. The Office for Budget Responsibility had forecast borrowing at £137.3 billion, leaving a gap that now threatens Chancellor Rachel Reeves' fiscal headroom and self-imposed budget rules. Economists warn that Reeves may have to consider tax increases or deeper spending cuts in the upcoming autumn budget to meet these rules, especially as global uncertainties and higher borrowing costs persist. The situation is compounded by new US tariffs, which have not yet been fully factored into official forecasts and could further strain the UK's fiscal position. Officials stress the importance of economic stability while reviewing public spending to identify potential savings.