UK Budget Logs Second Biggest March Shortfall

The UK budget deficit widened sharply to the second highest level for the month of March taking the overall borrowing for the financial year ending March 2023 to the fourth biggest on record, official data revealed Tuesday.

Excluding banks, public sector net borrowing increased by GBP 16.3 billion from the previous year to GBP 21.5 billion in March, the Office for National Statistics reported. This was the second highest March borrowing since monthly records began in 1993.

Data showed that government received GBP 81.0 billion in taxes and other income. This was only GBP 1.6 billion more than in March 2022.

On the other hand, spending rose GBP 15.1 billion to GBP 104.7 billion, partly reflecting the cost of energy support schemes.

In the financial year ending March, the budget registered a shortfall of GBP 139.2 billion, which was equivalent to 5.5 percent of gross domestic product.

Borrowing increased by GBP 18.1 billion from the previous financial year, marking the fourth-highest FY borrowing since records began in 1946. Nonetheless, borrowing was below the Office for Budget Responsibility forecast of GBP 152.4 billion.

At the end of March, public sector net debt increased to GBP 2.53 trillion or around 99.6 percent of GDP. The debt-to-GDP ratio reached levels last seen in the early 1960s.

Chancellor Jeremy Hunt said GBP 21.5 billion borrowing in March was “eye-watering” as the government borrowed funds to help families during the pandemic and to withstand energy crisis.

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