Higher Than Expected Borrowing Could Imperil Government’s Tax Cut Ambitions

The Treasury, in its ambition to cut taxes in the election year, has dealt a blow as the borrowing for the past year was recorded to be higher than expected.

Official borrowing figures have revealed that borrowing in the financial year to March was at £120.7 billion, £6.6 billion more than forecast by the Office for Budget Responsibility (OBR).

Borrowing in March was £11.9 billion, £4.7 billion less than in the same month last year, but £10 billion higher than estimated by economists.

Given the higher-than-forecast borrowing, any announcement of new tax cuts by Chancellor Jeremy Hunt could raise questions among economists and politicians.

Jessica Barnaby, deputy director for public sector finances at the Office of National Statistics (ONS), said that the latest national debt figures will not stop Mr. Hunt from “looking to cut taxes later this year in the run up to the general election.”

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