FX.co ★ UK Borrowing Remains Below Official Estimate

The UK government borrowing remained below the official estimate in the financial year to February period, data from the Office for National Statistics showed on Tuesday.

In the financial year-to-February, public sector net borrowing excluding banks totaled GBP 138.4 billion, the third-highest financial year-to-February borrowing since monthly records began in 1993.

But this was GBP 25.9 billion less than the official Office for Budget Responsibility forecast. The OBR estimated that borrowing could reach GBP 183.0 billion in financial year ending 2022.

The Chancellor of the Exchequer Rishi Sunak will present his Spring Statement 2022 to Parliament on March 23 and the OBR publishes its new forecast.

At the Spring Statement tomorrow, Chancellor of the Exchequer Rishi Sunak will try to strike a balance between the near-term political benefits of supporting households now with the medium-term goal of fiscal restraint, allowing him to loosen policy ahead of the 2024 general election, Bethany Beckett, an economist at Capital Economics, said.

In February, PSNB excluding public sector banks was GBP 13.1 billion in February, which was GBP 2.4 billion less than in February.

Current receipts increased 8.8 percent in February from the last year. Expenditure gained 3.8 percent as inflation sharply lifted the interest payments on government debt.

Data showed that public sector net debt excluding public sector banks was GBP 2,326.8 billion at the end of February, or around 94.7 percent of gross domestic product, maintaining a level not seen since the early 1960s.

The coronavirus support schemes combined with reduced cash receipts and a fall in GDP were cited as the major reasons for the increase in net debt.