UK government borrowing exceeded expectations by nearly £15 billion in the year to March, reaching £151.9 billion. This surge, attributed to increased spending on pay and benefits despite higher tax revenue, puts pressure on Chancellor Rachel Reeves's fiscal targets. Reeves is traveling to Washington to negotiate a US trade deal to mitigate the impact of US tariffs on UK exports. Experts predict potential tax hikes or spending cuts to meet borrowing targets, given sluggish economic growth and rising interest rates. The IMF forecasts lower-than-expected UK growth for 2025.

Prepared by Christopher Adams and reviewed by editorial team.