UK borrowing lowest for three years but Iran war clouds outlook
The improvement in government finances is unlikely to last, analysts say, with the impact of the Iran way yet to hit.
Coverage by Political Leaning
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Notable Quotes
"The full impact from the energy price shock caused by the conflict is still to come."
— Ruth Gregory , Academic
"Our deficit is down £19.8bn because of our plan to cut borrowing."
— James Murray , Politician
"With the ongoing conflict in Iran causing concerns over fuel shortages and spiking prices, the downtick may also be driven by consumers beginning to limit their vehicle usage to necessary journeys."
— Sheena McGuinness , Executive
"In a volatile world the decisions we are taking are the right ones to keep costs down, take back our energy security and cut borrowing and debt."
— James Murray , Politician
"The good news for the chancellor is that full-year borrowing for 2025/26 came in at £132.bn, down from £151.9bn in the previous financial year, and in line with the latest OBR forecast."
— Thomas Pugh , Executive
"Today’s figures rounding off the tax year show the government is continuing to lean heavily on stealth taxes to support the public finances."
— Rachael Griffin , Academic
"Borrowing was almost 20 billion ($27 billion) lower than in the previous financial year."
— Tom Davies , Academic
"This is a bit of a cup half full moment for the government."
— Danni Hewson , Executive
Key People
Head of financial analysis at AJ Bell.
Senior UK economist at Pantheon Economics.
James Murray is the Chief Secretary to the Treasury.
Mel Stride is the Shadow Chancellor.
Tax and financial planning expert at Quilter.
Chancellor who announced guaranteed paid work placements for youth.
Deputy chief UK economist at Capital Economics.
Co-head of energy and natural resources at RSM UK.
Chief economist at RSM UK.
Statistician at the Office for National Statistics.
Tags
All Coverage
The improvement in government finances is unlikely to last, analysts say, with the impact of the Iran way yet to hit.
Britain's budget deficit narrowed to a six-year low, but a drop in fuel duty suggests the Iran war is affecting consumer spending and tax revenues.
UK government borrowing fell to £132 billion in the 12 months to March, the lowest since 2022-23, but concerns rise over the impact of the Iran war on public finances.
UK government borrowing fell £20 billion in the latest financial year, but fears are mounting over a hit to the public finances from the Iran war.
Chancellor Rachel Reeves received good news as borrowing fell, but economists warn that the Iran war will lead to a surge in government borrowing and decimate fiscal plans.
Britons became more pessimistic about their finances and the wider economy after the Iran war drove up petrol prices, according to a closely watched survey.
The UK government reduced the public deficit in the 12 months to the end of March, AFP reports citing official data, but the Middle East war risks triggering increases to borrowing.
UK government borrowing fell to a six-year low in the last year, but economists warn that the Middle East conflict will push it up again, with rising oil and gas prices.
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