2024.03.2110:04:00UTC+00UK Budget Deficit Worse Than Expected

The UK budget deficit was wider than economists' expectations in February despite an increase in receipts, official data revealed on Thursday.

Public sector net borrowing, or PSNB, excluding public sector banks decreased by GBP 3.4 billion from the previous year to GBP 8.4 billion in February, the Office for National Statistics said. However, borrowing was well above economists' forecast of GBP 5.95 billion.

For the financial year to February, borrowing totaled GBP 106.8 billion, which was GBP 4.6 billion less than in the same eleven month period a year ago.

The Office for Budget Responsibility projected borrowing to settle at GBP 114.1 billion for the financial year ending March 2024 as a whole.

Capital Economics' economist Ruth Gregory said this means that borrowing in March will have to come in at just GBP 7.2 billion to achieve the forecast but it seems unlikely.

However, the economist said disappointing borrowing data probably will not stop the Chancellor from unveiling more tax cuts.

At GBP 86.4 billion, the central government's receipts were GBP 7.2 billion more than in the previous year. At the same time, expenditure rose GBP 2.9 billion to GBP 89.6 billion, data showed.

The interest payable on central government debt was GBP 6.8 billion, the lowest February interest payable since 2022.

At the end of February, public sector net debt excluding banks increased GBP 157.4 billion to GBP 2,659.4 billion.

The government debt was estimated at 97.1 percent of GDP that was around 2.3 percentage points more than at the end of February 2023.