Public sector net borrowing figures from the Office for National Statistics – released at the same time as a second estimate of Q1 GDP that confirmed growth of 0.8% – show the government borrowed £11.5bn this April, up £1.9bn year-on-year.
The figure, which excludes the “temporary effects of financial interventions” and other external factors, was worse than economists’ expected figure of around £8.5bn.
The pound fell against the dollar in response, dropping from $1.6909 to $1.687 following publication of the figures, but remains near multi-year highs.
“Since the OBR expects borrowing this year to be about 11% lower than last year, today’s borrowing number suggests that the fiscal consolidation has not begun the fiscal year on a good footing,” said Samuel Tombs, UK economist at Capital Economics.
“That said, revisions to the monthly borrowing numbers tend to be larger at the start of the fiscal year, so we would caution against drawing any strong conclusions from April’s figures.”
Q1 UK GDP, meanwhile, was unrevised from the first estimate on 29 April. Business investment was a notable highlight, rising 2.7%, and is now 8.7% higher than a year ago.
