Chancellor ready for budget headache despite falling loan estimates

Chancellor faces budget headache despite government estimates falling by £30bn

Chancellor Rishi Sunak (pictured) has a headache as he tries to get the towering debt under control

According to projections from the Institute for Fiscal Studies (IFS), the government bond this year is likely to be £30 billion lower than current estimates.

But the chancellor is still dealing with a headache as he tries to bring the skyrocketing debt mountain under control, while the longer-term pressures leave little room for manoeuvre, the think tank said.

In his March budget, Rishi Sunak calculated that the UK would borrow £234 billion in fiscal year 2021-2022 to weather the pandemic.

But with borrowing falling faster than expected given last year’s heady highs, the IFS now thinks the total could be more like £203bn.

But the IFS believes the economic damage wrought by the pandemic, and rising interest payments on the UK’s current £2 trillion debt pile as the Bank of England raises interest rates from their record lows, is putting the country on a tricky course. can put.