Britain reported the highest February budget deficit since at least 1993, boosted by government expenditure on energy bill assistance programmes.

Official figures indicated that Britain reported the highest February budget deficit since at least 1993, when monthly records began, boosted by government expenditure on energy bill assistance programmes.

According to the Office for National Statistics, net public sector borrowing in February was £16.68 billion, excluding state-owned banks. Inflation is not factored into the calculations.

The figure exceeded all estimates in a Reuters survey of experts, who predicted £11.4 billion in public sector net borrowing excluding state-owned banks.

The ONS stated that the borrowing statistics for February represented "significant" spending on energy bill assistance programmes.

The higher-than-anticipated borrowing highlights the challenge surrounding Finance Minister Jeremy Hunt, who must provide costly help for individuals and companies in the short term while also figuring out how to lower taxes by the time of the next election, which is scheduled in 2024.

Last Monday, Hunt stated that the energy subsidies will be extended through June, but that they would likely stop after that.

According to the ONS, spending on energy support programmes totalled £9.3 billion in February alone.

"Borrowing is still high because we're committed to help individuals and businesses as prices rise, and we're investing around £1,500 per household this winter to cover just under half of people's energy bills," Hunt said on Tuesday.

Forecasts from the Office for Budget Responsibility (OBR) published with his annual budget last week revealed a better prognosis for the public finances compared to its last report in November, with borrowing averaging £10 billion lower in each future fiscal year than previously expected.

Even as the OBR stated that this represented a less dismal economic picture than four months earlier, borrowing is still expected to be roughly £50 billion more each year compared to its March 2022 predictions, which were made before the full extent of the oil shock was known.

According to today's figures, the total borrowing from April 2022 to February 2023 was £132.2 billion. The Office for Budget Responsibility predicted last week that total borrowing in 2022/23 would be £152.4 billion.

The UK's debt interest expense was £6.9 billion in February, £1.3 billion pounds less than a year earlier, according to the ONS, reflecting reductions in payments on inflation-linked government bonds.

(Investing.com, Reuters.com, ONS.gov.uk)