The UK government’s borrowing bill rose less than expected in February, helping shrink the country’s budget deficit just ahead of the chancellor’s annual budget which was delivered this month.
Official statistics show Britain’s public sector net borrowing, excluding taxpayer-backed banks, came in at £1.8bn last month, lower than a forecasted rise of £3.2bn and falling by £19.9bn over the financial year starting from April 2016. The ONS said this was the lowest year to date borrowing bill before the financial crisis hit in 2008.
Total government debt however continued to climb, rising to 85.4 per cent of GDP – up 2.3 percentage points from the same month last year.
Announcing his first annual budget earlier this month, chancellor Philip Hammond announced a slight fall in overall UK borrowing during the course of the current parliament to 1.9 per cent of GDP.
The government’s overall debt to GDP pile is expected to peak at 88.8 per cent next year, 1.4 per cent lower than forecast in November’s Autumn Statement, according to the Office for Budgetary Responsibility.
Britain’s public finances have been given a lift from a rise in self-employment tax receipts as people and “a delay in requests for contributions to the EU budget, meaning that payments made a year earlier weren’t repeated”, noted Ruth Gregory at Capital Economics.