UK undershoots annual borrowing target by £700m
The UK government budget came in below its annual borrowing target by £700m, official figures show – but the Iran war is likely to blow a hole in Rachel Reeves’s carefully calculated fiscal “headroom” over the coming months.The government borrowed a net total of £132bn for the financial year ending in March, the Office for National Statistics (ONS) said.This slightly undershot the £132.7bn that the Office for Budget Responsibility (OBR) had forecast just last month.The total was £19.
8bn less than the £151,9bn borrowed in the previous financial year, after rounding, although it was still the sixth highest on record,The figure was the lowest in three years and the best result since Labour came into power in July 2024,The last time it was lower was in the year to March 2023, when the government borrowed £127,3bn.
“The headline numbers coming in lower than the OBR’s expectations for the year as a whole will be a welcome boost to the chancellor,” Elliott Jordan-Doak, a senior UK economist at Pantheon Macroeconomics, said.For the month of March, public sector net borrowing – the difference between spending and income – was £12.6bn, which was £1.4bn lower than a year earlier and the lowest since March 2022.City economists had expected the March figure to be lower, however, at £10.
3bn.The annual figure was better than economists had expected, partly because of revised borrowing figures by the ONS for previous months, as well as higher tax receipts and lower debt interest payments.James Murray, the chief secretary to the Treasury, said: “Our deficit is down £19.8bn because of our plan to cut borrowing.In a volatile world the decisions we are taking are the right ones to keep costs down, take back our energy security and cut borrowing and debt.
”Reeves announced £26bn in tax rises in her budget in November to lower debt and offset rising government spending on public services and upgrades to the UK’s infrastructure,The ONS said that tax receipts for central government rose by £54,7bn to £845,4bn for the financial year, after previous tax rises from the chancellor,Changes to the rate of national insurance contributions, which came into effect in April last year, brought in an extra £33bn to reach £206.
8bn,Revenue from capital gains tax rose by £8,5bn compared with last year to £22,2bn,This was largely because of investors disposing of assets in 2024 ahead of an expected rise in rates in Reeves’s autumn budget in October 2024.
The tax from these disposals was due at the end of January 2026.The government also made £8.5bn from inheritance tax in the financial year, up by more than £200m, as frozen thresholds mean more families are hit by the tax.In a sign people are perhaps using cars less to cut down on petrol and diesel usage amid rising costs, the amount collected in fuel duty in March was the lowest for any month since July 2023.Reeves has implemented a fiscal rule that requires the government to fund day-to-day spending with taxes by the end of the parliament.
The government’s day-to-day spending rose by £65,6bn, or 6,4%, in the year to March,In February the chancellor announced that her buffer – or headroom – to meet this rule by 2030 had increased in its latest projections to £23,6bn, from £21.
7bn at the time of the November budget,However, the conflict in the Middle East is expected to jeopardise this headroom, with rising inflation and potential job cuts as well as higher interest rates eating into this target,Ruth Gregory, the deputy chief UK economist at Capital Economics, said: “We do not expect this improvement to last long,We think the energy price shock will mean that borrowing overshoots the OBR’s forecast by a huge £29bn for the 2026-27 fiscal year and by about £13bn in subsequent years,”
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Breaking: UK consumer confidence has fallen for the third month in a row, as people grow more nervous about their personal financial situation and the economy.Data provider GfK’s Consumer Confidence Barometer, just released, has fallen by four points to -25 in April, the biggest drop in a year.That’s the lowest level since autumn 2023, indicating that the disruption and high energy prices caused by the Iran war is alarming consumers.When asked about the UK economy, the measure for the country’s general economic situation over the last 12 months decreased by eight points to -51. Expectations for the general economic situation over the coming 12 months fell by six points to -43, GfK reports
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The soaring price of jet fuel will cost American Airlines another $4bn this year, the carrier has said, wiping out forecast profits.The airline, the world’s largest by passengers flown, said that the fuel crisis from the US-Israel war on Iran could push it into losses during 2026, having forecast profits approaching $1.8bn before bombing started.The price of jet fuel has more than doubled since the conflict began at the end of February. While many European airlines have hedged their fuel, locking in a purchase price for months or years ahead, American carriers have been exposed to the price rises
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The betting and data company Sportradar has relationships with hundreds of illegal gambling operators including several that appear to operate in Iran and Russian-occupied Crimea, a new report alleges.A study compiled by the financial analysts Callisto Research claims to have identified more than 270 unlicensed betting companies offering a variety of services including sports betting, virtual gaming and crypto casinos that purport to be products of Sportradar, whose branding and tools are visible on many of their websites. Callisto Research is an activist research firm that has disclosed short selling Sportradar stock after releasing its report.Sportradar AG is listed on the Nasdaq and its share price dropped as much as 30% following the publication of Callisto’s report on Wednesday, before closing the day 23% down on the start of trading.Sportradar makes its money from distribution deals that enable it to both service and police the gambling industry
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A White House photo celebrating a champion women’s sports team has drawn backlash due to the positioning of Donald Trump and a group of men, who overshadowed the female athletes by lining up in front of them.The University of Georgia women’s tennis team was one of several collegiate teams to visit the White House on Tuesday to mark a recent NCAA championship win. In a photo shared by press aide Margo Martin, Donald Trump and five Georgia staffers and coaches took up the front row of a stage setup, with 11 women standing in the background on a riser.The men standing alongside Trump were, from left to right: Georgia deputy athletic director Ford Williams, athletic director Josh Brooks, head coach Drake Bernstein, associate head coach Jarryd Chaplin and assistant coach Will Reynolds.“A photo is worth a thousand words …” former tennis star Martina Navratilova wrote on X
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