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The
budget deficit for 2023/24 totaled 120.7 billion pounds ($149
billion), equivalent to 4.4% of economic output, the Office for
National Statistics said.
The Office for Budget Responsibility last month forecast a
deficit of 114.1 billion pounds, or 4.2% of economic output.
The figures pose a headache for finance minister Jeremy Hunt,
whose Conservative Party trails the opposition Labor Party by a
wide margin in opinion polls.
Last month Hunt announced tax cuts in a budget that met the
government's own fiscal rules by the slimmest of margins.
Tuesday's figures meant Hunt was in danger of running out of
headroom altogether, said Rob Wood, chief UK economist at
consultancy Pantheon Macroeconomics.
"We expect the Chancellor to cut taxes again before a likely
October or November general election despite borrowing
overshooting his forecasts," Wood said, adding that Hunt could
pencil in "unrealistically weak public spending" to create more
headroom.
"We suspect whoever the next government is will end up pushing
through at least some tax rises to balance the books."
In response to Tuesday's data, Britain's debt agency ramped up
its planned sales of gilts for the current 2024/25 year by 12.4
billion pounds to 277.7 billion pounds.
The Debt Management Office said the increase reflected the fact
that central government's net cash requirement for 2023/24 came
in almost 10 billion pounds higher than forecast.
In March alone, public sector net borrowing, excluding
state-controlled banks, was 11.94 billion pounds ($14.74
billion).
March's borrowing, the last of the 2023/24 financial year, was
above the median forecast of 10.2 billion pounds in a Reuters
poll of economists.
Despite the budget deficit for 2023/24 coming in higher than
forecast, it was 7.6 billion pounds less than in 2022/23, when
the state subsidised household soaring energy bills, and
double-digit inflation led to a surge in debt interest payments.
The finance ministry said Tuesday's figures showed it was
important to stick to the plan to reduce Britain's debt.
($1 = 0.8102 pounds)
(Reporting by Andy Bruce and Sachin Ravikumar; editing by Sarah
Young and Christina Fincher)
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