UK budget deficit widens, overshooting forecasts

UK’s current budget deficit rose to a provisional £74.6 billion in the fiscal year ending March 2025, £12.6 billion higher than the previous year and £13.9 billion above the Office for Budget Responsibility’s (OBR) forecast of £60.7 billion.

The shortfall, which measures borrowing to fund day-to-day public sector activities, represented 2.6 per cent of GDP—up from 2.3 per cent a year earlier—marking the twelfth highest ratio since the financial crisis in 2008/09.

Total public sector borrowing reached £151.9 billion in the year, £20.7 billion more than a year earlier and £14.6 billion above the OBR’s forecast. In March alone, borrowing stood at £16.4 billion, the third-highest for that month since records began in 1993.

Public sector net debt, excluding public sector banks, was estimated at 95.8 per cent of GDP at end-March 2025, the highest level since the early 1960s. Net financial liabilities stood at 83.5 per cent of GDP, up 2.6 percentage points from a year earlier.

The central government net cash requirement was £21.1 billion in March, £7.4 billion lower than in March 2024, bringing the full-year total to £180.5 billion—£7.9 billion higher than forecast.

Attribution: Amwal Al Ghad English
Subediting: M. S. Salama