UK politics live: Fresh blow for Reeves as borrowing rises to £10.7bn ahead of spring statement
In her spring statement next week, the chancellor is expected to try blaming the drop on worsening global economics amid Donald Trump’s tariffs
In another setback for Rachel Reeves, UK Government borrowing soared above forecasts last month as public sector spending rose, putting pressure ahead of the spring statement next week.
The Office for National Statistics (ONS) said public sector net borrowing was £10.7 billion in February.
This was £100 million more than the same month last year and the fourth-highest February on record.
The UK’s official economic growth forecast for the year is also reportedly set to halve in a blow for a Labour government that has pledged to prioritise growth.
The expected growth rate for the 2025 financial year, from April to March 2026, will be downgraded by the Office for Budget Responsibility (OBR) next week, The Telegraph reported, reducing from 2 per cent to around 1 per cent.
In her spring statement next week, Rachel Reeves is expected to try blaming the drop on worsening global economics amid Donald Trump’s tariffs.
The chancellor is also set to announce the biggest cuts since the George Osborne era on Wednesday, forcing Labour to reject claims the government is returning to a policy of austerity, days after the party slashed the welfare bill by around £5 billion.
Full story: Bank of England holds interest rates amid concerns over inflation and Trump tariffs
Interest rates have been held at 4.5 per cent by the Bank of England (BoE) amid mounting global uncertainty and growing trade tensions sparked by Donald Trump.
That was the level reached in February when the Monetary Policy Committee (MPC) made its first cut since November last year, in so doing bringing the rate down to its lowest level since mid-2023.
While the interest rate is still expected to fall further over the remainder of the year, only two further cuts are now expected across 2025 amid an ongoing battle with inflation, rising costs for businesses and an uncertain wider economic outlook.
A significant portion of that uncertainty is due to Donald Trump’s trade tariffs being placed – and altered or withdrawn at short notice – which has created unrest in industries and could see the cost of selling their goods to the United States rise significantly. While the UK has yet to implement any retaliatory tariffs, an escalating trade war could significantly hit economic growth as well as consumers’ spending power.
Read the full story:
Bank of England deliver interest rates verdict amid inflation and Trump tariffs
Breaking: Interest rates held at 4.5%
The Bank of England has held interest rates at 4.5 per cent, as expected.
We’ll be bringing you all the latest updates and analysis.
Lib Dems say voters 'haven't forgiven the Conservatives' for damage caused
The Liberal Democrats described the Tory local election launch as a “desperate attempt to shore up the crumbling Conservative vote”.
Responding to the launch event, Lib Dem deputy leader Daisy Cooper said: “The first brick in the blue wall came tumbling down in Buckinghamshire in the Chesham and Amersham by-election. Now Kemi Badenoch is back there in a desperate attempt to shore up the crumbling Conservative vote as people in the home counties turn to the Liberal Democrats.
“Whilst Kemi’s Conservatives compete with Reform in their policy agenda, the Liberal Democrats are focused on delivering for residents on issues including the cost of living, sewage in our rivers and the emergency in our NHS and care. Voters in Buckinghamshire and across the country haven’t forgiven the Conservatives for all the damage they’ve done. Badenoch will hear the very same if she knocks on doors today.
“Voters have a clear choice in May, and across the country, including in Buckinghamshire, they are turning to the Liberal Democrats as community champions who will stand up for them.”
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