UK public sector debt fell more than expected in April and was lower than previously estimated for the last full fiscal year, giving the Chancellor more room to addressing the cost of living crisis.
Net public sector debt was £ 18.6 billion in April 2022, well below £ 24.3 billion in the same month last year, according to data from the National Statistics Office on Tuesday. .
The April figure was also lower than the £ 19.1 billion forecast by the Office of Budgetary Responsibility, the UK’s tax inspection body.
During the fiscal year to March, the public sector borrowed £ 144.6 billion, £ 7.2 billion below previous estimates. It was also less than half of the previous year’s loan, reflecting the boom in the pandemic economy. But it was still above the £ 127.8 billion projected in March by the OBR.
Debt fell in April compared to last year as revenues rose as the economy grew and spending fell after declining government support for households and businesses.
Central government revenue was £ 70.2 billion in April, £ 9.9 billion more than the same month last year, driven by strong tax revenue.
At the same time, central government spending was £ 76 billion, £ 6.7 billion less than the same month last year.
However, public debt, the debt accumulated over time, was around 95.7 percent of GDP, a level not seen since the early sixties.
Bethany Beckett, an economist at Capital Economics, said she expected Chancellor Rishi Sunak to announce more support for households as rising inflation reduced their real incomes.
“Given the choice between doing little to help households with the cost of living crisis or violating their own tax rules, the chancellor will likely opt for the latter and announce more support for the fall 2022 budget,” he said. dir Beckett.
Sunak said after the figures were released that the government should take a “balanced and responsible approach” to supporting the people now and not burdening future generations.
“We are on track to reduce public debt between 2024 and 2025,” he said.