UK Government Borrowing Surges to £20.2 Billion in April, Exceeding Forecasts

Strategic Insights -

The UK government's borrowing increased to £20.2 billion in April, exceeding analyst predictions and raising concerns about the Chancellor's ability to meet fiscal targets. This marks the fourth-highest April borrowing figure on record, with a £1 billion increase compared to the same period last year. The Office for National Statistics (ONS) reported that public sector net borrowing significantly overshot predictions, with several factors contributing to the increased borrowing, including public sector pay rises, national insurance payments, and higher benefit and state pension payouts.

Key Takeaways:

  • The UK government's borrowing increased to £20.2 billion in April, exceeding analyst predictions of £17.6 billion.
  • This marks the fourth-highest April borrowing figure on record, with a £1 billion increase compared to the same period last year.
  • Public sector net borrowing overshot predictions due to rises in public sector pay, national insurance payments, and higher benefit and state pension payouts.
  • Central government spending on goods and services saw a substantial year-on-year increase of £4.2 billion, reaching £37.9 billion.
  • Social benefits paid by the state rose £1.3 billion to £26.8 billion after inflation-linked rises in many benefits.
  • Public sector net debt was estimated at 95.5 per cent of UK GDP at the end of April 2025.
  • The proportion of debt was 0.7 percentage points higher than a year earlier and remains at levels last seen in the early 1960s.
  • Receipts were up on last April, thanks partly to the higher rate of national insurance contributions.
  • However, this was outweighed by greater spending, due to rising public services' running costs and increases in many benefits and state pensions.
  • The ONS also revised down its borrowing figure for the latest fiscal year, to £148.3 billion after receiving more information on tax receipts.
  • It was still around £11 billion above the forecast set by the Office for Budget Responsibility.

Statistics:

  • £20.2 billion: UK government borrowing in April, exceeding analyst predictions.
  • £17.6 billion: Analyst predictions of UK government borrowing in April.
  • £1 billion: Increase in borrowing compared to the same period last year.
  • £4.2 billion: Year-on-year increase in central government spending on goods and services.
  • £37.9 billion: Total central government spending on goods and services.
  • £26.8 billion: Social benefits paid by the state.
  • £1.3 billion: Increase in social benefits paid by the state.
  • 95.5 per cent: Public sector net debt as a percentage of UK GDP.
  • 0.7 percentage points: Increase in the proportion of debt compared to the previous year.
  • £148.3 billion: Revised borrowing figure for the latest fiscal year.
  • £11 billion: Difference between revised borrowing figure and forecast set by the Office for Budget Responsibility.

Sources:

  • Office for National Statistics (ONS)
  • Office for Budget Responsibility (OBR)
  • UK Government
  • Chancellor Rachel Reeves
  • Chief Secretary to the Treasury Darren Jones
  • Office for Budget Responsibility (OBR) - "Fiscal Consolidation Plan"
  • UK Government - "Fiscal Responsibility"