Source: Sharecast
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.”