Blow for Rishi Sunak's hopes of pre-election tax cuts as government borrowing ... trends now
Rishi Sunak's hopes of pre-election tax cuts suffered a major blow today as figures showed government borrowing coming in above forecasts.
The public sector was £120.7billion in the red in the year to March, less than the previous 12 months but £6.6billion more than predicted by the Treasury watchdog.
Despite separate data suggesting the economy is recovering from recession, analysts questions whether Chancellor Jeremy Hunt will now have scope to ease the burden before the country goes to the polls.
Many Tories have been pinning their hopes on another round of tax cuts to open a dividing line with Labour and give Brits a feel-good factor before the election.
Borrowing was £11.9billion in March, which is £4.7billion less than a year ago, but higher than the £10billion expected by most economists.
Rishi Sunak and Jeremy Hunt have been hoping to push through more tax cuts before calling the election
The public sector was £120.7billion in the red in the year to March, less than the previous 12 months but £6.6billion more than predicted by the Treasury watchdog
There was brighter news in the closely-watched PMI, which showed the private sector growing at its fastest rate for almost a year
The Office for Budget Responsibility (OBR) had forecast borrowing of £114.1billion in the year to the end of March.
Jessica Barnaby, ONS deputy director for public sector finances said: 'Spending was up about £58billion, with increased spending on public services and benefits outstripping large reductions in interest payable and energy support scheme costs.'
Andrew Goodwin, senior economic adviser to the EY Item Club, said: 'Unless the Chancellor is prepared to assume even greater spending restraint, it's unlikely there will be another tax-cutting fiscal event before the election.'
However, Rob Wood at Pantheon Macroeconomics said: 'We expect the Chancellor to cut taxes again before a likely October or November general election, despite borrowing overshooting his forecasts.'
He added: 'Hunt can
