UK government borrowing hits £20.2bn in April

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The UK government’s borrowing increased unexpectedly in April against the backdrop of increasing public spending, and the accumulation of pressure on Chancellor Rachel Reeves before reviewing high -risk spending next month.

The figures published by the National Statistics Office showed on Thursday that the borrowing was 20.2 billion pounds in the first month of the new tax year, an increase of a shortage of 19.1 billion pounds in April 2024.

The economists of Reuters expected that the difference between spending and income in the public sector will drop to 17.9 billion pounds last month.

The ONS said that ORS was headed by an increase in spending on public services and benefits in April.

The jump over the spending of 6.6 billion pounds on an annual basis in increasing revenues of 5.6 billion pounds, which was partially driven by the high national insurance contributions announced by Reeves in the budget.

“This raises opportunities that if the advisor wants to adhere to its financial rules, more tax increases in the autumn budget will be needed,” said Ruth Gregory, the economist in economic consulting, although the fiscal year has started a bad start. “

Reeves will put detailed expenses for individual government departments to review spending on June 11th by the Labor Party government since 2000.

It is under pressure to meet its financial rule to achieve a balance between daily spending with revenues by 2029-30 while improving public services and stimulating growth.

The slim chamber of the consultant is scheduled to be calculated, which was last calculated at a price of 9.9 billion pounds, under additional pressure through the economic impact of US president Donald Trump.

In a sign of political pressure on the government, Prime Minister Sir Kerr Starmer announced on Wednesday a partial turn on winter fuel payments that Reeves revealed last July.

The U-U-Urn was a sign of the challenge that Reeves faced to maintain a narrow grip on public spending before the autumn budget in which she will face calls from within her party to raise taxes.

In a note sent to Reeves before her spring statement in late March, Prime Minister Angela Rainer urged the advisor to make more tax increases instead of reducing public spending.

In response to April numbers, Darren Jones, the main secretary of the Treasury, said: “After years of economic instability that paralyzed the public portfolio, we took decisions to achieve stability in our public funds, which helped to provide four interest rates since August, and reduced the cost of borrowing to companies and workers.”

Although the economy is expanding at the fastest pace in one year in the first quarter, the Bank of England is expected to slow down.

The separate figures released on Thursday showed that the private sector activity was contracted in May, albeit at a slower rate than April.