Chancellor Jeremy Hunt has been handed a £13bn windfall from the UK public finances holding up better than expected, raising the chances of tax cuts ahead of the next general election, official figures out today reveal.

Numbers from the Office for National Statistics (ONS) this morning showed the UK borrowed around £139bn in the year to March, about 5.5 per cent of GDP and just over £13bn lower than the Office for Budget Responsibility’s (OBR) forecast at last month’s budget.

It means Hunt has some room to hand families and businesses some cash back while still keeping Britain’s finances in check. There is speculation an election could take place next year before the cut off date of January 2025.

Philip Shaw, an economist at Investec, said he remains “convinced that Chancellor Jeremy Hunt will be able to announce a package of tax cuts ahead of a likely general election next year”.

Last year’s borrowing undershoot means “the Chancellor will have a bit more headroom to cut taxes and/or raise spending,” Ruth Gregory, deputy chief UK economist at consultancy Capital Economics, said.

The better than expected yearly figure wasn’t railroaded by the UK notching the second highest monthly borrowing total for March since records began in 1993.

The ONS said the country borrowed £21.5bn last month, just below the City’s expectations of £22.8bn and up from £13.3bn in February.

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