British public borrowing has fallen by more than half since its peak during the pandemic, but debt servicing costs are rising rapidly, official figures showed on Tuesday ahead of new budget plans from finance minister Rishi Sunak.
Sunak is under pressure to announce measures on Wednesday that will ease the immediate impact on households from soaring inflation, which is largely driven by higher energy costs, exacerbated by Russia's invasion of Ukraine.
Borrowing for 2021/22 is comfortably on track to undershoot the 183 billion pounds or 7.9% of gross domestic product forecast by the Office for Budget Responsibility, largely thanks to stronger-than-expected tax revenue."With inflation and interest rates still on the rise, it's crucial that we don't allow debt to spiral and burden future generations with further debt," the finance minister, or chancellor, said in a statement.
Borrowing in February alone came in much higher than expected at 13.1 billion pounds - more than 5 billion pounds above economists' average forecast in a Reuters poll - although this overshoot was largely cancelled out by a 4.2 billion pound upward revision to January's budget surplus.
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