Unlock Editor’s Digest Lock for Free
Overshots expectations with Prime Minister Rachel Reeves, who is facing the impact of Donald Trump’s tariffs in the UK government borrowing in March and the entire fiscal year.
The shortfall between government revenue and spending was £16.4 billion last month, £151.9 billion in the 12 months to March, the National Bureau of Statistics said Wednesday.
This compares with the expected £16 billion shortfall for economists in March and the £137.3 billion forecast of £137.3 billion from the government’s fiscal watchdog office for budget responsibility.
Last month, OBR warned that despite recent welfare cuts, the government’s “financial chamber,” or budget room for piloting, remains historically small at £9.9 billion.
The UK’s economic outlook has since deteriorated, potentially putting more pressure on tax revenue and finances.
Like many other countries, the UK is hit by Trump tariffs, which includes 10% overall duties and higher levels of steel and automobiles.
On Tuesday, the IMF reduced the UK’s 2025 growth forecast to 1.1% from a previous estimate of 1.6%, warning of widespread economic disruption from trade tensions. We reduced our global growth forecast by 0.5 percentage points to 2.8%.
This is a developing story
