Has government borrowing really been brought under control?

To what extent have the public finances really been brought under control? This morning’s update from the Office for National Statistics reveals that public sector net borrowing reached £16.7 billion in February. This is more than double the figure from February 2022 of £7.1 billion, and also well above the consensus estimate of around £11 billion.   

It is the highest February borrowing figure since records began, primarily driven upward by the Energy Price Guarantee, which continues to see the government cap the unit price of energy and subsidise the rest. Last February, Russia was only starting its illegal invasion of Ukraine; now the public sector net borrowing figure reflect all that’s been done to tackle yo-yoing energy costs, trying to keep bills manageable for the public.

But despite this new record high, there is some good news in today’s update. While February’s figures soared, cumulative borrowing for the fiscal year is still £20 billion below what the Office for Budget Responsibility forecast it would come to at last week’s fiscal event.