Chancellor Osborne misses borrowing target

Chancellor George Osborne in Downing Street this week

The government borrowed £74bn in the year to March, £1.8bn more than George Osborne's borrowing target.

The Office for Budget Responsibility had forecast government borrowing of £72.2bn for the 2015-16 financial year.

However, there are likely to be revisions to the data that could alter the final borrowing figure.

Public borrowing in March fell by £2.6bn compared with the same month last year to £4.8bn.

Public sector net debt, excluding public sector banks, jumped £47.5bn to £1,594bn for the year to the end of March - the equivalent to 83.5% of gross domestic product.

Surplus target

The annual borrowing figure of £74bn was £17.7bn less than the previous year, the Office for National Statistics said.

The decrease was mainly due to a fall of £20.4bn in central government net borrowing, although that was offset by a rise in local government borrowing of £4bn.

Borrowing by councils hit £5.9bn - mainly due to a fall in grants from central government.

Mr Osborne has pledged to return the UK to a budget surplus by 2020, with the OBR forecast predicting that the UK will have a surplus of £10.4bn in 2019-20 and £11bn the year after.

In a hearing after last month's Budget, OBR chairman Robert Chote told MPs there was still a 55% chance that Mr Osborne would hit his surplus target despite reversing a decision on disability payment cuts.

In a note, analysts at Capital Economics said: "We still think that the OBR's prognosis for the next five years is in fact too gloomy, meaning that austerity might be scaled back further ahead."

Martin Beck, senior economic advisor to the EY ITEM Club, said: "While today's numbers are likely to cause the Chancellor some embarrassment - he also missed his objective to see the debt/GDP ratio drop in 2015-16 - the fairly modest overshoot means that the OBR's forecast may ultimately be vindicated."