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Government borrowing falls in April | Government borrowing falls in April |
(32 minutes later) | |
Government borrowing in April fell from a year earlier, but was still the fourth-highest figure for the month since records began. | |
Borrowing - the difference between spending and tax income - was £18.6bn, down £5.6bn from April last year. | |
April saw the first contributions to government revenues of the increase to National Insurance. | |
However, spending during the month also included the £3bn cost of the council tax rebate. | |
Under this rebate, many households will receive £150 to help with higher energy bills. | |
April's borrowing total was slightly lower than forecast, with the government's independent forecaster - Office for Budget Responsibility - having predicted a figure of £19.1bn. | |
However, it was £7.9bn higher than in April 2019, before the pandemic. Borrowing surged during the pandemic as the government spent billions to support the economy. | |
Recession fears grow as rising prices hit spending | |
Warning of economic downturn as interest rates rise | |
Tax revenues rose by £5.5bn to £50.2bn in April, the Office for National Statistics (ONS) said, as the increase to National Insurance rates began. | |
Interest payments on government borrowing were £4.4bn, which was lower than expected. However, analysts expect this figure to surge in the months ahead as they are linked to inflation rates. | |
"Following the latest spike in RPI inflation, we now expect monthly interest spending to reach an eye-watering £16bn in June," said Michal Stelmach, senior economist at KPMG UK. | |
Chancellor Rishi Sunak, said: "While we are doing what we can to help families deal with rising prices, inflation is also pushing up our spending on debt interest - which is expected to reach £83bn this year. | Chancellor Rishi Sunak, said: "While we are doing what we can to help families deal with rising prices, inflation is also pushing up our spending on debt interest - which is expected to reach £83bn this year. |
"We must take a balanced and responsible approach to support people now, while also not burdening future generations, and we're on track to drive public debt down by 2024-25." | "We must take a balanced and responsible approach to support people now, while also not burdening future generations, and we're on track to drive public debt down by 2024-25." |
The ONS also cut its estimate for borrowing during the previous financial year by £7.2bn to £144.6bn, although this was still the third-highest financial year borrowing total since records began in 1947. | The ONS also cut its estimate for borrowing during the previous financial year by £7.2bn to £144.6bn, although this was still the third-highest financial year borrowing total since records began in 1947. |
"The lower-than-expected public borrowing of £18.6bn in April and the downward revisions to borrowing in 2021-22 will only add to the pressure on the chancellor to go big when finalising the imminent support package for households," said Paul Dales, chief UK economist at Capital Economics. | |
"We think any support will be small and targeted rather than big and widespread." | "We think any support will be small and targeted rather than big and widespread." |