Borrowing - the shortfall between tax revenues and spending - hit £17.8 billion in December, £10.1 billion up on last year and £3.7 billion above a forecast by the Office for Budget Responsibility (OBR).
Rachel Reeves was today warned to avoid a ‘doomed loop’ of spending cuts as a surge in government borrowing delivered a fresh blow to the beleaguered Chancellor.
The parlous state of the public finances will pile the pressure on the Chancellor to consider spending cuts or tax hikes later this year. ‘Then I think you really are into a doomed loop between debt and growth. And that’s a situation to avoid at all costs.’ Comments from Andy Haldane , former chief economist at the Bank of England , put the case for not turning to cuts - implying that taxpayers will again have to bear much of the strain'
Elliott Jordan-Doak of Pantheon Macroeconomics said: ‘The Chancellor is already under pressure to clarify how the Government will meet its new fiscal rules. The Chancellor already has only a relatively narrow amount of ‘headroom’ for meeting her fiscal rules, of £9.9 billion
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