The UK Government borrowed more than expected for the latest financial year, according to new official figures.
Public sector net borrowing rose to £151.9 billion in the year to the end of March, the Office for National Statistics (ONS) said.
This was £14.6 billion higher than the £137.3 billion forecast by the Office for Budget Responsibility.
The yearly figure was also £20.7 billion more than the same period a year earlier.
The borrowing figure refers to the difference between what the Government spends on the public sector and what it receives in income from tax and other receipts.
The ONS said it was the third-highest level of borrowing in any financial year since records began in 1947, behind the Covid pandemic in the year to 2021, and the 2010 financial year following the global crisis.
It comes as borrowing rose to £16.4 billion last month, the third-highest March borrowing since monthly records began, the new figures show.
Grant Fitzner, the ONS’s chief economist, said: “Our initial estimates suggest public sector borrowing rose almost £21 billion in the financial year just ended as, despite a substantial boost in income, expenditure rose by more, largely due to inflation-related costs, including higher pay and benefit increases.
“At the end of the financial year, debt remained close to the annual value of the output of the economy, at levels last seen in the early 1960s.”
The latest figures reflect the period shortly before Donald Trump unveiled a range of tariffs on US imports which heightened global trade tensions and is expected to limit economic growth around the world.
The International Monetary Fund (IMF) on Tuesday lowered its growth outlook for the UK by 0.5 percentage points this year, and cut the US’s growth projections by 0.9 percentage points.
The UK’s downgrade partly reflected tariffs, but also weaker consumption amid higher inflation which has been driven by bills and energy price hikes.
Chancellor Rachel Reeves, who is spending three days in the US capital Washington DC for the IMF’s spring meetings, said: “The world has changed and we are in a new era of global trade.
“I am in no doubt that the imposition of tariffs will have a profound impact on the global economy and the economy at home.”
But she said that the Government should not be “knocked off course or to take rash action” and vowed to “always act to defend British interests”.
On Wednesday, Chief Secretary to the Treasury, Darren Jones, stressed that the Government “will never play fast and loose with the public finances”.
“We are laser-focused on making sure taxpayer money is delivering our Plan for Change missions to put more money in people’s pockets, rebuild the NHS and strengthen our borders,” he said.
Shadow chancellor and Conservative MP Mel Stride said the latest ONS figures “lay bare the price the British people are paying for Rachel Reeves’ choices”.
“By fiddling the fiscal rules, increasing borrowing by £30 billion a year and piling up debt – these figures are alarming but not surprising,” he said.
The self-imposed fiscal rules limit the Government’s ability to borrow to fund day-to-day spending.
