UK government borrowing in the financial year ending March 2025 reached £151.9bn, overshooting official forecasts by almost £15bn, according to the Office for National Statistics. The figure is more than £20bn higher than the previous year and £14.6bn above the Office for Budget Responsibility’s prediction made less than a month ago.
The larger-than-expected borrowing, driven by lower tax receipts and higher local authority and central government spending, puts pressure on Chancellor Rachel Reeves. Economists warn she may need to raise taxes or announce deeper public spending cuts in the autumn budget to maintain her self-imposed fiscal rules.
Ruth Gregory of Capital Economics said: “Public borrowing was overshooting the OBR’s forecast even before the influence from the tariff chaos is felt. This raises the chances that if the chancellor wishes to stick to her fiscal rules, more tax hikes in the autumn budget will be required.”
The borrowing overshoot comes amid mounting economic strain from Donald Trump’s escalating trade war, which has increased debt interest payments and slowed business activity. The S&P Global composite PMI fell to 48.2 in April, indicating contraction, while the IMF described Trump’s tariffs as a “major negative shock”.
Public sector net debt stood at 95.8% of GDP, one of the highest levels since the 1960s. Shadow chancellor Mel Stride called the figures “alarming”, while the OBR noted the borrowing figure is provisional and likely to be revised.
