UK borrowing lowest for three years but Iran war clouds outlook

The improvement in government finances is unlikely to last, analysts say, with the impact of the Iran way yet to hit.

Britain's budget deficit narrowed to a six-year low, but a drop in fuel duty suggests the Iran war is affecting consumer spending and tax revenues.

UK government borrowing fell to £132 billion in the 12 months to March, the lowest since 2022-23, but concerns rise over the impact of the Iran war on public finances.

UK government borrowing fell £20 billion in the latest financial year, but fears are mounting over a hit to the public finances from the Iran war.

Chancellor Rachel Reeves received good news as borrowing fell, but economists warn that the Iran war will lead to a surge in government borrowing and decimate fiscal plans.

Britons became more pessimistic about their finances and the wider economy after the Iran war drove up petrol prices, according to a closely watched survey.

The UK government reduced the public deficit in the 12 months to the end of March, AFP reports citing official data, but the Middle East war risks triggering increases to borrowing.

UK government borrowing fell to a six-year low in the last year, but economists warn that the Middle East conflict will push it up again, with rising oil and gas prices.