Chancellor Rachel Reeves has been given an unexpected dose of good news after official figures showed UK Government borrowing fell in the latest financial year and undershot official forecasts by £700 million.
The Office for National Statistics (ONS) said public sector borrowing was estimated to have dropped £19.8 billion, or 13.1%, to a lower-than-expected £132 billion in the 12 months to the end of March.
This was below the £132.7 billion forecast by the UK’s fiscal watchdog, the Office for Budget Responsibility (OBR), and the lowest since 2022-23.
Public sector net borrowing excluding public sector banks was £132.0 billion in the financial year ending (FYE) March 2026, £19.8 billion less than in the previous year and £0.7 billion below the Office for Budget Responsibility (OBR) forecast.
➡️ https://t.co/uD8dOhUiUx pic.twitter.com/04oIErU0pu
— Office for National Statistics (ONS) (@ONS) April 23, 2026
It comes as borrowing fell to £12.6 billion in March, down by £1.4 billion year-on-year and the lowest borrowing for the month since 2022, but higher than expected by most economists.
Tom Davies, ONS senior statistician, said: “Borrowing was almost £20 billion lower than in the previous financial year, and broadly in line with the OBR’s forecast.
“As a proportion of gross domestic product, it fell to its lowest level since 2019-20, just prior to the pandemic.
“Although spending has risen this financial year, this was more than offset by increased receipts.
“The figures also show borrowing for last month on its own was 10% less than in March last year.”