George Osborne, the Chancellor, has been dealt an embarrassing blow as official figures revealed that he has failed to meet his deficit reduction targets.
The Government borrowed £4.8bn last month, excluding costs related to stakes in bailed-out banks, according to the Office for National Statistics (ONS). This put the public sector’s total borrowing in the 2015-16 financial year at £74bn.
The Office for Budget Responsibility (OBR), which produces official forecasts for the Government, updated its forecasts for the deficit only last month .
Revealing the OBR’s forecast at the Budget in March, the Chancellor announced that the Government expected to borrow £72.2bn in the fiscal year – a projection £1.8bn wide of the mark.
It quickly became apparent that the UK would have to borrow more than planned.
A week after the new deficit targets were made public, ONS figures showed that the public sector had borrowed £70.7bn in the first 11 months of the financial year .
This left Mr Osborne with just £1.5bn to play with in March – an objective he has failed to meet, barring a drastic revision of the figures at a later date.
However, the Chancellor was able to cut the deficit by £17.7bn compared with the previous fiscal year. Total Government debt stood at £1,594.1bn at the end of last month, or 83.5pc of the economy’s annual output.
The borrowing figures came as a shock slowdown in retail sales was announced by the ONS in a separate update.
Sales fell for a second consecutive month in March, sliding by 1.3pc. The drop was much greater than the 0.1pc anticipated by analysts.
Vicky Redwood, of Capital Economics, said that the data provided “yet more evidence of a slowdown in the UK’s economic recovery”.