A series of accounting changes have blown apart the government’s deficit reduction plans by adding £17.8 billion to last year’s borrowing.
Revised figures from the Office for National Statistics, including changes to student loans, public sector pensions and corporation tax, increased borrowing in the year to March by 75 per cent to £41.4 billion.
A similar sum will be added to future years’ deficits that, once combined with the government’s higher spending plans, would be expected to push borrowing above the government’s self-imposed limit of 2 per cent of GDP in 2020-21. The Office for Budget Responsibility said that the changes would add “at least £15 billion a year” to the deficit.
John Hawksworth, chief economist at PWC, the accounting group, said: “Based on the…