UK budget deficit exceeds forecast even before imposition of US duties

On Wednesday, Britain's Office for National Statistics reported a budget deficit for the fiscal year ended in March. The deficit amounted to $202.33 billion. This is 10.63% above the UK Office for Budget Responsibility (OBR) expectations of $182.88 billion.

The volume of borrowing in March totaled $21.84 billion, which is 3.8% higher than British economists' expectations of $21.04 billion.

Last month, Britain's Finance Minister Rachel Reeves cut spending and raised taxes to prevent the deficit from exceeding projections. However, there is a strong chance she will have to announce new measures this year because of the damaging effects of US President Trump's policies.

On Tuesday, the International Monetary Fund (IMF) downgraded its forecast for UK GDP growth over the next two years. The rate fell more than that of Europe's biggest economies. That has raised doubts among investors that the UK budget deficit will be reduced in the current fiscal year as projected.

Meanwhile, the federal government's borrowing for 2024–2025 was estimated at $240.43 billion instead of $229.9 billion as the OBR expected in its March 26 statement.