UK public sector borrowing tops OBR view in April; retail sales down

UK public sector borrowing was higher than expected last month, numbers on Friday showed, while retail sales were shy of expectations.

The Office for National Statistics said borrowing in April totalled £24.34 billion, rising from £11.48 billion in March and higher than the £19.46 billion recorded a year prior.

The ONS said the April figure was ‘£3.4 billion more than the £20.9 billion forecast by the Office for Budget Responsibility’.

However, borrowing in the financial year to March was below an OBR forecast. Borrowing in the financial year ended March was provisionally estimated at £129.0 billion, down 15% on-year and £3.7 billion below the OBR’s £132.7 billion forecast.

Borrowing in the year to March was estimated at 4.2% of gross domestic product, the lowest figure since financial 2020 when it was 2.6%.

The ONS said its forecast for borrowing in the year to March was reduced by £3.0 billion from its last estimate.

The ONS added: ‘Public sector net debt excluding public sector banks – a measure of the amount of money owed to the UK private sector and overseas less any liquid assets held – was provisionally estimated at 94.2% of GDP at the end of April 2026; this was 0.5 percentage points more than in April 2025 and remains at levels last seen in the early 1960s.’

Separately, it said retail sales volumes fell 1.3% in April from March. They had risen 0.6% in March, revised down from an initially reported 0.7% climb. A lesser decline of 0.6% had been expected for April, according to consensus cited by FXStreet.

‘Fuel volumes fell in April as some retailers suggested that motorists were conserving fuel. This followed strong March growth, with retailers reporting that motorists stocked up as prices rose,’ the ONS said.

On-year, sales were flat in April, massively undershooting an FXStreet cited forecast of a 1.3% rise.

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