UK borrows more than expected in March and full fiscal year

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The UK government borrowed more than expected in March and the full fiscal year, according to official statistics that will be a disappointment for the chancellor as he weighs further tax cuts ahead of the next election.

Public sector net borrowing was £11.9bn last month, £4.7bn less than in the same period last year, the Office for National Statistics said on Tuesday. However, this was higher than the £10.2bn forecast by economists polled by Reuters.

In the full fiscal year to the end of March, borrowing was £120.7bn, £7.6bn less than in the same period a year ago, but £6.6bn more than the £114.1bn forecast by the Office for Budget Responsibility, the fiscal watchdog, in March.

Last week chancellor Jeremy Hunt told the Financial Times he would like to cut taxes in an autumn fiscal event “if we can”. This is despite warnings from the IMF about Britain’s fragile public finances and rising debt trajectory.

Senior Conservatives said the Treasury was preparing for another fiscal event, which would depend on the timing of an election that must be called this year.

The party is trailing Labour by about 20 percentage points in opinion polls, according to the FT’s poll tracker.