Chancellor Rachel Reeves undergoes increased pressure to increase taxes or reduce public spending, because official figures show that government loans were more expensive than expected, and tax revenues dropped below expectations.
The largest budget surplus since the start of files in 1993 was reported by the National Statistics Office (ONS) in January.
This means that the public sector has hosted more taxes and other income it has spent, resulting in a surplus of 15.4 billion pounds sterling.
But the figures showed that the loan was 11.6 billion pounds sterling more than a year earlier and the fourth higher ever recorded.
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For the year as a whole, the loan is ahead of the independent forecastist, the level of budgetary liability (OBR) of 105.4 billion pounds sterling, having reached 118.2 billion pounds sterling.
January is still a great month for tax sockets as self-evaluated yields enter, but tax revenue and surplus were lower than economists’ forecasts.
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It was the first data press release in public sector since January market caliber.
Last month, the book weakened and borrowing costs aged 10 and 30 Mrs Reeves would break its self -imposed budgetary rules – to reduce government debt and balance the budget by 2030 – or have to increase
Government borrowing fees increased during the month, which led High interest rate decades On the long -term debt of the State, known as obligations.
A higher inflation and a higher interest rate expectation for longer caused the tip and made fear that the chancellor has eroded his so-called Tax Head Fair – The money she could spend while joining her rules.
What does this mean for tax reductions and expenses?
“This will only get worse from here,” said Elliott Jordan-Doak, economist in the United Kingdom of Pantheon Macro.
The economic research firm said that it expects the Chancellor’s head margin to have been destroyed and that the expense reductions will follow with tax increases in the fall.
Another research company in economics has reached a similar conclusion: “In order to respect its tax rules, the Chancellor will have to increase taxes and / or reduce expenses in the tax update on March 26,” said the economist British capital, Alex Kerr.
Responding to the data, the deputy defect of Ms. Reeves, Darren Jones, said: “This government is committed to ensuring economic stability and respecting our non-negotiable tax rules.
“We will never play quickly and loosen with public finances, which is why we cross each book passed, line by line, for the first time in 17 years, ensuring that each penny to the country’s priorities in our plan of change . “”