UK April Borrowing Hits £24.3 Billion, Retail Sales Down 1.3%
UK government borrowing hit £24.3 billion in April, the highest since 2020, while retail sales dropped 1.3%. These figures, driven by increased spending and energy shocks, underscore a fragile economic outlook. The IMF has cautioned the UK to maintain efforts to reduce its budget deficit.
UK government borrowing reached £24.3 billion in April, exceeding forecasts and marking the worst start to a fiscal year since 2020. This figure was £4.9 billion higher than April last year and surpassed the Office for Budget Responsibility's (OBR) forecast of £20.9 billion. The deficit was driven by higher government spending, including on social benefits.
Simultaneously, retail sales fell by a sharper-than-expected 1.3% in April, attributed to the energy shock from the Iran war impacting household spending. Excluding petrol, retail volumes dropped 0.4%, with clothing and online sales down. Debt interest payments hit a record £10.3 billion for April, unadjusted for inflation. These figures highlight a deteriorating growth outlook and fragile fiscal backdrop, according to Capital Economics economist Ruth Gregory. The IMF has warned the UK against relaxing efforts to cut the budget deficit.