UK government borrowing jumps to £20.2bn in April
Update:
Date:
Title: Introduction: UK borrowing rises to £20.2bn in April
Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the eurozone.
It's a new financial year, but the same old story for the UK government, as borrowing rises faster than expected.
The latest public finance figures, just released, show that the UK borrowed £20.2bn in April. That's £1bn more than in April 2024 and the fourth-highest April borrowing since monthly records began in 1993.
City economists had forecast a deficit of around £18bn, so the new financial year has not gott off to a great start for Rachel Reeves, at a time when the chancellor is under pressure to raise taxes to avoid cuts to welfare payments.
The public finances report shows that central government's current receipts rose by £5.1bn year-on-year, due to increased tax receipts – including £1.7 billion in Income Tax, £500m in Value Added Tax (VAT), £500m in tobacco duty, £400m in stamp duty (on land and property), and £200m in Corporation Tax receipts.
However, spending rose too – central government's current expenditure increased by £4.2bn, as pay rises and inflation pushed up the cost of goods and services, and some benefits increased in line with inflation.
ONS deputy director for public sector finances Rob Doody says:
'At £1 billion higher than the same time last year, this April's borrowing was the fourth highest for the start of the financial year since monthly records began more than 30 years ago.
'Receipts were up on last April, thanks partly to the higher rate of National Insurance contributions. However, this was outweighed by greater spending, due to rising public services' running costs and increases in many benefits and state pensions.'
Happily, though, the interest payable on central government debt fell by £500m to £9.0bn, due to lower payments on inflation-linked bonds.
7am BST: UK public finances for April
9am BST: Eurozone 'flash' PMI report for May
9am BST: IFO survey of eurozone business confidence
9.30am BST: UK 'flash' PMI report for May
11am BST: CBI industrial trends
1.30pm BST: US weekly jobless claims 1.30pm
Update:
Date: 2025-05-22T06:32:38.000Z
Title: It's not all bad news for Rachel Reeves, though.
Content:
The Office for National Statistics has revised down its estimate for borrowing in the last financial year, to £148.3bn.
That's £3.7bn less than the initial estimate, but still £11bn more than had been forecast by the Office for Budget Responsibility (OBR).
Update:
Date: 2025-05-22T06:31:07.000Z
Title: Analyst: More tax rises may be needed
Content: Today's borrowing figures are 'disappointing', and highlight the Chancellor's lack of wiggle room, says Ruth Gregory, deputy chief UK economist at Capital Economics.
Gregory told clients:
April's public finances figures showed that despite the boost from the rise in employers' National Insurance Contributions (NICs), the fiscal year got off to a poor start. 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.
Update:
Date: 2025-05-22T06:26:37.000Z
Title: Chart: UK public finances in April
Content: Here's a chart showing the details of today's public finances:
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Update:
Date: 2025-05-22T06:25:02.000Z
Title: Introduction: UK borrowing rises to £20.2bn in April
Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the eurozone.
It's a new financial year, but the same old story for the UK government, as borrowing rises faster than expected.
The latest public finance figures, just released, show that the UK borrowed £20.2bn in April. That's £1bn more than in April 2024 and the fourth-highest April borrowing since monthly records began in 1993.
City economists had forecast a deficit of around £18bn, so the new financial year has not gott off to a great start for Rachel Reeves, at a time when the chancellor is under pressure to raise taxes to avoid cuts to welfare payments.
The public finances report shows that central government's current receipts rose by £5.1bn year-on-year, due to increased tax receipts – including £1.7 billion in Income Tax, £500m in Value Added Tax (VAT), £500m in tobacco duty, £400m in stamp duty (on land and property), and £200m in Corporation Tax receipts.
However, spending rose too – central government's current expenditure increased by £4.2bn, as pay rises and inflation pushed up the cost of goods and services, and some benefits increased in line with inflation.
ONS deputy director for public sector finances Rob Doody says:
'At £1 billion higher than the same time last year, this April's borrowing was the fourth highest for the start of the financial year since monthly records began more than 30 years ago.
'Receipts were up on last April, thanks partly to the higher rate of National Insurance contributions. However, this was outweighed by greater spending, due to rising public services' running costs and increases in many benefits and state pensions.'
Happily, though, the interest payable on central government debt fell by £500m to £9.0bn, due to lower payments on inflation-linked bonds.
7am BST: UK public finances for April
9am BST: Eurozone 'flash' PMI report for May
9am BST: IFO survey of eurozone business confidence
9.30am BST: UK 'flash' PMI report for May
11am BST: CBI industrial trends
1.30pm BST: US weekly jobless claims 1.30pm
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