Public sector borrowing drops for first time since pandemic
Government borrowing fell in April but remained at its second highest level on record for the month, according to figures released on Tuesday by the Office for National Statistics.
Public sector borrowing was £31.7bn, down £15.6bn from the same month last year and marking the first annual fall since the start of the pandemic. The amount was comfortably below the Office for Budget Responsibility’s forecast of £39bn and consensus expectations of £32.4bn.
Still, borrowing remains at its second highest April level since records began in 1993 amid continued spending on the Covid crisis.
Meanwhile, the ONS estimate of borrowing in 2020/21 was revised down to £300.3bn from £303.1bn .This is well below the £354.6bn forecast by the OBR in March’s Budget but still the highest borrowing since financial year records began in March 1946.
The figures also showed that April tax receipts were up 7% on the year to £58bn, while central government bodies spent £95.9bn, down 11.9% from April 2020.
Capital Economics economist Ruth Gregory said: "April’s public finances figures showed that the government’s financial position isn’t as bad as the Office for Budget Responsibility (OBR) predicted only two months ago, reinforcing our view that the tax hikes and spending cuts that most fear may be avoided."