Osborne exceeds borrowing target

The Office for National Statistics (ONS) has calculated that the government borrowed £1.8 billion more than its initial target of £72.2 billion.

The Office for Budget Responsibility (OBR) had forecast an expected figure of government borrowing at £72.2 billion, for the 2015-16 financial year. However, in the year to March, it borrowed a total of £74 billion.

Nonetheless, the OBR has maintained that the figure is subject to revision and that the recent data may not necessarily reflect overall state of public finances.

The figures also found that public borrowing in March had decreased by £2.6 billion compared to the previous year. It highlighted that public sector debt, excluding public sector banks, increased by £47.5 billion to £1,594 billion for the year to the end of March.

Commenting on the news, the Office for National Statistics (ONS) said the annual borrowing figure of £74 billion was £17.7 billion less than the previous year. It explained that the decrease was mainly due to a £20.4 billion reduction in central government net borrowing.

The ONS also added that there was a rise in local government borrowing of £4 billion, with councils borrowing £5.9 billion in total. It suggested the increase was mainly due to a fall in grants from central government.

The news comes after Chancellor George Osborne pledged to return the UK to a budget surplus by 2020, with the OBR predicting that the UK will have a surplus of £10.4 billion in 2019-20 and £11 billion the year after.

Commenting on the the OBR’s forecast, analysts at Capital Economics argued: "We still think that the OBR's prognosis for the next five years is in fact too gloomy, meaning that austerity might be scaled back further ahead."