Setback for Hammond as February borrowing rises

The Chancellor remains under pressure as he seeks to balance the books
The Chancellor remains under pressure as he seeks to balance the books

Chancellor Philip Hammond has faced a setback in his efforts to shore up the UK public finances after Government borrowing grew last month.

Data from the Office for National Statistics show public sector net borrowing, excluding state-owned banks, rose by £2.5 billion to £1.3bn in February, compared with a £1.2bn surplus last year.

The deficit excluding banks for the current financial year - April to February - continued to hit its lowest level for 10 years, dropping £2.5bn to £41.4bn.

The update comes after the UK’s fiscal watchdog revised down its predictions for Government borrowing earlier this month, saying the deficit would now hit £45.2bn for 2018 - £4.7bn lower than its forecast in November.

However, the Office for Budget Responsibility (OBR) said growing financial pressure from an ageing population would lead Mr Hammond to miss his 2025 target for balancing the books by two years.