The last financial year, up until February saw public spending reach £132billion, far exceeding forecasts and sending the country’s debt levels skyrocketing higher still
As the Spring Statementlooms just around the corner, Chancellor Rachel Reeves has been dealt a new blow with the revelation that the Government borrowed a whopping £20 billion more than anticipated.
Public spending for the last financial year up to February hit a staggering £132 billion, far outstripping forecasts and sending the nation’s debt levels soaring even higher. Borrowing in the previous month alone amounted to £10.7 billion, overshooting the initial target of £7 billion by a hefty £3.7 billion.
This implies that the total borrowing for the year is on track to reach a jaw-dropping £151 billion, which is £23 billion above the October forecast, as per the Institute for Fiscal Studies.
The financial think tank calculated this would be £63 billion more than what the Office for Budget Responsibility had predicted a year ago – when the Tories were still at the helm, reports the Express.
With debt levels and expenditure significantly exceeding expectations, this piles on additional pressure on Rachel Reeves ahead of Wednesday’s Spring Statement, where she is expected to roll out a series of spending cuts to rein in spiralling costs. Amidst this uncertainty, The Sun. reports that the Chancellor is also reportedly bracing herself for the OBR to drastically slash its economic growth forecast for the year.
To add insult to injury, the £9.9 billion buffer she had factored into her tax-raising Budget last Autumn has now been virtually wiped out due to stubbornly high inflation costs. As a result, in order to comply with her own fiscal rules, it is now the funding for Whitehall departments that will face cuts to balance the finances and get back on track.
It is understood that Ms Reeves will attribute the UK’s weak growth outlook to global uncertainties, specifically highlighting the impact of recent events such as the tariffs imposed by US President Donald Trump on several countries worldwide.
However, while Ms Reeves is willing to blame international events for the economy’s slow growth, many business leaders have instead criticised her own policies for hindering growth, particularly the £40 billion worth of tax increases set to take effect next month.
Critics argue that these tax hikes will stifle business output, with Shadow Chancellor Mel Stride urging his opposite number to “get a grip.”
Meanwhile, Labour’s Darren Jones, the Chief Secretary to the Treasury, hinted that the changes did not go far enough, saying: “We must go further and faster to create an agile and productive state that works for people.”
