Public sector borrowing in the UK has significantly surpassed forecasts, with figures indicating a £20 billion excess this financial year. February alone saw borrowing of £10.7 billion, breaking records and raising concerns regarding Chancellor Rachel Reeves' ability to adhere to fiscal rules—specifically covering day-to-day spending with tax revenues and reducing debt-to-GDP ratios. Economists warn that with sluggish growth and increasing borrowing costs, Reeves' options for tax and spending decisions are limited, which may necessitate earlier fiscal adjustments ahead of the budget in June.
Public sector borrowing has surged past official expectations by more than £20 billion, putting pressure on Chancellor Rachel Reeves ahead of next week's Spring Statement.
February's borrowing figures were significantly higher than predicted, with a total of £10.7 billion, marking one of the highest totals for that month since records began.
Economists express doubt regarding the Chancellor's ability to meet her fiscal rules due to significant erosion of her margins stemming from sluggish economic growth and rising borrowing costs.
With public spending rising faster than tax revenues, the current fiscal situation poses serious challenges for the Chancellor going into the planned spending review in June.
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