Chancellor Philip Hammond narrowly meets deficit target

Chancellor Philip Hammond just about met his deficit target this year despite a much bigger than expected spike in borrowing in March, official figures showed on Tuesday.

The deficit narrowed to £52 billion in the year to March — a smidgen above the £51.7 billion forecast by the Office for Budget Responsibility in last month’s Budget.

The shortfall in March alone widened to £5.1 billion as government spending rose and VAT receipts disappointed — a potential harbinger of High Street weakness.

The deficit has been flattered this year by receipts brought forward to avoid last April’s dividend tax rise, although borrowing is set to rise next year.

IHS Markit chief UK economist Howard Archer said the deficit news was “a boost for the Chancellor’s credibility after it took a knock after he swiftly and embarrassingly scrapped his March budget plans to raise National Insurance.”