Reeves under pressure as deficit rise shows 'perilous' state of public finances

Worse than expected public spending data has piled pressure on Rachel Reeves before next week's spring statement, with government borrowing rising by much more than expected last month to £10.7bn.

- Richard Partington

The monthly total - the difference between public sector spending and income - sharply overshot a Reuters poll of experts that had predicted a deficit of £6.6bn.

The figures from the Office for National Statistics showed February's borrowing was little changed from a year earlier, but over the financial year to date it was up almost £15bn on the same period last year.

Isabel Stockton, a senior research economist at the Institute for Fiscal Studies, said a simple extrapolation suggested borrowing for the financial year as a whole could now come in at about £151bn - as much as £23bn more than forecast by the independent Office for Budget Responsibility (OBR) in October.

"Having boxed herself in with promises to meet her fiscal targets, not to raise taxes further and not to return to austerity for public services, easy or risk-free options for the chancellor are in short supply," she said.