“Today’s numbers highlight how accelerating inflation is affecting the public finances as higher interest costs offset higher tax revenues. As expected, the deficit for the financial year is the third biggest ever in peacetime in cash terms, although government spending has declined following two years of pandemic borrowing.
“The cost-of-living crisis and further increases in interest rates – which are already seeing households make cuts to their spending – are likely to put further pressure on the Chancellor to increase support to hard-hit families. With the potential that these circumstances could trigger a recession, the Chancellor has a great deal to think about as we move into the new financial year.”
Notes to editors:The ONS data is available here.