Government borrowing higher than expected as pressure builds on Reeves

UK government borrowing was higher than expected in February, adding pressure to Chancellor Rachel Reeves ahead of her Spring Statement next week.

Borrowing - the difference between spending and income from taxes - was £10.7bn last month, according to official figures.

The government's independent forecaster had predicted that borrowing would be £6.5bn for the month.

Economists have suggested Reeves will announce spending cuts next week to meet her self-imposed rules for the economy, which the Treasury reiterated were "non-negotiable".

"We must go further and faster to create an agile and productive state that works for people," said Darren Jones, chief secretary to the Treasury, adding that the government "will never play fast and loose with the public finances".

However, economists have warned the higher-than-expected borrowing last month "puts more pressure" on the Chancellor ahead of the Spring Statement next Wednesday.

Dennis Tatarkov, senior economist at KPMG, said the latest borrowing figures "raised the risk" of Reeves missing her borrowing rules, which self-imposed by most governments in wealthy nations and are designed to reassure investors and maintain credibility with financial markets.

Next Wednesday, the Office for Budget Responsibility (OBR) will release its latest forecast for the UK economy and public finances and will detail what money the chancellor has against her financial rules.

Alex Kerr, UK economist at Capital Economics, said he OBR would likely conclude the chancellor's buffer had been "wiped out".

"We expect her to announce further non-defence spending cuts, on top of the welfare cuts already unveiled," he added.

Reeves's two main rules are: not to borrow to fund day-to-day public spending; and to get debt falling as a share of the UK economic output by 2029/30.