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UK public sector borrowing fell more than expected in April and was lower than previous estimates for the last full financial year, giving the Chancellor more leeway to deal with the cost of living crisis.
Public sector net borrowing was £18.6bn in April 2022, well below £24.3bn for the same month last year, Office for Finance data showed on Tuesday. National Statistics.
The April figure was also lower than the £19.1bn forecast by the Office for Budget Responsibility, Britain’s budget watchdog.
In the year to March, the public sector borrowed £144.6bn, £7.2bn less than previously estimated. It also represented less than half of the previous year’s borrowing, reflecting the economy‘s rebound from the pandemic. But it was still higher than the £127.8bn forecast in March by the OBR.
Borrowing fell in April from a year ago as revenue rose as the economy grew, and spending fell as government support for households and businesses fell.
Central government revenue was £70.2bn in April, £9.9bn more than the same month last year, driven by strong tax receipts.
Meanwhile, central government spending was £76bn, £6.7bn lower than the same month last year.
However, public debt, borrowing accumulated over time, was around 95.7% of GDP, a level not seen since the early 1960s.
Bethany Beckett, an economist at Capital Economics, said she expected Chancellor Rishi Sunak to announce additional support for households as soaring inflation reduced their real income.
“Given the choice between providing little support to households with the cost of living crisis or breaking his own budget rules, the Chancellor will likely opt for the latter and announce additional support in the autumn 2022 budget,” Beckett said.
Sunak said after the figures were released that the government must take a “balanced and responsible approach” to support people now while not burdening future generations.
“We are on track to reduce public debt by 2024 to 2025,” he said.