Public sector borrowing falls as tax receipts rise
By Abigail Townsend
Date: Thursday 23 Apr 2026
(Sharecast News) - Public borrowing fell in the year to March, official figures showed on Thursday, broadly in line with the fiscal watchdog's forecast.
According to early estimates from Office for National Statistics, borrowing was £12.6bn last month, £1.4bn less than in March 2025 and the lowest March borrowing since 2022. It was, however, notably more than the £10.3bn expected by economists.
For the financial year ending March as a whole, however, borrowing was estimated to have fallen by 13.1% to £132bn, narrowly undershooting the Office for Budget Responsibility's forecast for £132.7bn.
Tom Davis, senior statistician at the ONS, said: "As a proportion of GDP, [borrowing] fell to its lowest level since 2019-2020, just prior to the pandemic.
"Although spending has risen in the financial year, this was more than offset by increased receipts."
Central government receipts rose 5.6% in March to £102bn, and by 8.4% to £1.23trn over the full year. Public sector spending was £1.36trn over the same period.
The current budget deficit - defined as borrowing to fund day-to-day public sector activities - was £50.9bn in the year, down 33.1% year-on-year.
Public sector net financial liabilities excluding public sector banks was provisionally estimated at 83.3% of GDP, a rise of 2.3 percentage points.
Danni Hewson, head of financial analysis at AJ Bell, said: "Just as one swallow does not make a summer, one year doesn't necessarily mean government finances will continue to improve. The Iran war has thrown a great big spanner in the works, hiking government borrowing costs and reigniting inflation, which is expected to have a knock-on to employment numbers."
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