UK borrowing overshoots target in pre-election blow

UK state borrowing last year overshot forecasts, official data showed Tuesday, dealing a blow to the Conservative government ahead of an election it is tipped to lose.

The government’s public sector net borrowing stood at £120.7 billion ($149.4 billion) in its year to the end of March, the Office for National Statistics said.

That marked an improvement from £128.3 billion in the previous fiscal year, but overshot an official forecast of £114.1 billion.

Analysts said they still expected finance minister Jeremy Hunt to cut taxes before the election.

Prime Minister Rishi Sunak and his chancellor of the exchequer Hunt have been boosted recently by cooler UK inflation.

“We expect the chancellor to cut taxes again before a likely October or November general election despite borrowing overshooting his forecasts,” said economist Rob Wood at Pantheon Macroeconomics.

Polling indicates that the Conservatives are on course to lose to the main opposition Labour Party after 14 years in power.