Rishi Sunak handed borrowing boost before spring statement
Rishi Sunak has been handed a boost from figures showing lower government borrowing than official estimates on the eve of the spring statement, despite a sharp rise in debt interest payments last month amid soaring inflation.
The Office for National Statistics said borrowing over the first 11 months of the financial year 2021-22 was £138.4bn, less than half the sum borrowed a year earlier and almost £30bn less than estimated by the Office for Budget Responsibility in October.
Helped by resilience in the jobs market after the end of furlough, analysts said the figures could strengthen Sunak’s position at the spring statement to offer tax cuts or additional spending to cushion the blow from soaring living costs.
However, the latest snapshot showed a worsening picture for the public finances in February as the budget deficit – the gap between spending and income – came in at £13.1bn, the second-highest borrowing figure for that month since records began in 1993.
It comes as soaring inflation pushed up interest payments on government debt by more than 50% to £8.2bn, the highest February figure on record. City economists had forecast a borrowing figure of about £8.1bn for the month.
The chancellor is understood to have drawn up a range of options to help with the cost of living crisis – including a 1p cut to income tax, raising the national insurance threshold and a significant cut to fuel duty.
However, Sunak may use the February borrowing figures to insist on a more limited approach. Responding to the latest snapshot, he said it was now “more important than ever” to take a responsible approach to the public finances.
“With inflation and interest rates still on the rise, it’s crucial that we don’t allow debt to spiral and burden
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