UK government borrowing rose to £20.2bn in April, £1bn higher than a year ago, making it one of the largest April deficits in three decades. The figures raise doubts about Chancellor Rachel Reeves’ ability to stick to her fiscal rules, including keeping borrowing for day-to-day spending off the table and reducing debt by 2029- 2030.
Economists warn that sluggish growth and new spending pressures such as the reversal of cuts to winter fuel payments and rising defence needs could make further tax rises unavoidable.
Ruth Gregory of Capital Economics called it a “poor start” to the financial year, suggesting shrinking tax receipts will deepen the challenge. EY’s Matt Swannell echoed the concern, pointing to added pressure from recent policy shifts.
Reeves previously ruled out tax hikes beyond the £40bn already announced in her 2024 Budget, the biggest increase since 1993. But growing fiscal strain may force a rethink.
Treasury Minister Darren Jones insisted the government’s actions have steadied the economy, citing falling interest rates since last summer.
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