Government borrowing higher than expected in April

The UK government borrowed more than expected in April, according to the latest official figures.

Borrowing, the difference between spending and income from taxes, was £24.3bn last month, £4.9bn higher than at the same point last year, the Office for National Statistics (ONS) said.

The figure was also higher than the £20.9bn that had been predicted by the government’s independent forecaster, the Office for Budget Responsibility (OBR).

ONS chief economist Grant Fitzner said April’s borrowing figure was “substantially higher” than a year earlier, with higher tax receipts being “more than offset by higher spending on benefits and other costs”.

The figures showed spending by government on benefits rose by £2.7bn from the same point last year, which the ONS said was largely caused by inflation-linked increases to many benefits and the earnings-linked rise to the state pension.

Debt interest payments were £10.3bn, up £0.9bn from a year earlier and a record high for the month of April.

“Public sector borrowing for April came in above the OBR’s March projection, largely driven by higher spending by the central government,” said Dennis Tatarkov, senior economist at KPMG UK.

“Given the increasingly uncertain economic outlook, this could set the tone for the rest of the fiscal year.”

Tatarkov said the impact of the Iran war on energy prices means that economic growth forecasts for this year are now well below the what the OBR had predicted in March.

“This means that public sector borrowing is likely to remain elevated in the medium term, potentially forcing the chancellor’s hand to make more tweaks to fiscal policy at the time of the autumn Budget,” he said.