Chancellor set for budget headache despite Government borrowing estimates falling by £30bn

By Daily Mail City & Finance Reporter

Published: | Updated:

Chancellor Rishi Sunak (pictured) is facing a headache as he tries to control the towering debt mountain

Chancellor Rishi Sunak (pictured) is facing a headache as he tries to control the towering debt mountain

Government borrowing this year is likely to undershoot current estimates by £30billion, according to forecasts from the Institute for Fiscal Studies (IFS).

But the Chancellor is still facing a headache as he tries to control the towering debt mountain, with longer-term pressures leaving little room for manoeuvre, the think-tank said.

In his March Budget, Rishi Sunak calculated that the UK was set to borrow £234billion in the 2021-2022 financial year to pull through the pandemic. 

But with borrowing falling at a faster rate than expected from the heady heights of last year, the IFS now thinks the total could be more like £203billion.

But the IFS believes that economic damage done by the pandemic, and rising interest payments on the UK’s current £2 trillion debt pile when the Bank of England hikes rates from their record low, could set the country on a tricky course.

Chancellor set for budget headache despite borrowing estimates falling

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Comments 0

Share what you think

No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards.

Add your comment

By posting your comment you agree to our house rules.