UK Budget Deficit at Three-Year Low But War Headwinds Build

UK government borrowing dropped to the lowest level in three years, a boost for Chancellor of the Exchequer Rachel Reeves that could be short-lived as the economic fallout from the Iran war spreads.

The deficit totaled £132 billion ($178 billion) in the fiscal year through March, a drop of £19.8 billion from 2024-25 and in line with the £132.7 billion forecast by the budget watchdog last month. The gap in March alone was £12.6 billion, the Office for National Statistics said.