Overall public sector net borrowing (PSNB) climbed to £20.71 billion in March, around £2.0 billion less than the market consensus but well above the £4.39 billion posted a year ago. This followed a significantly smaller revised £12.50 billion in February and reflects government support measures to tackle the energy crisis. Excluding public sector banks (PSNB-X), the shortfall stood at £21.53 billion versus £13.32 billion in March 2022, the second-highest borrowing for the month since records began in 1993.

The March update puts the provisional FY2022/23 PSND at £129.36 billion, up from £111.97 billion in FY2021/22 and the fourth largest behind the record Covid-inflated £303.49 billion posted in FY2020/21. On the same basis, the full year PSND-X was £139.21 billion after £121.09 billion and the FY2020/21 all-time high of £312.94 billion. Public sector net debt (PSND-X) at the end of March was £2,530.4 billion or around 99.6 percent of GDP, with the debt-to-GDP ratio at levels last seen in the early 1960s.

Despite the yearly deterioration, today's data leave the FY2022/23 PSND-X some £13.2 billion below the latest forecast made by the Office for Budgetary Responsibility so the government can claim that it is making progress towards fiscal stabilisation. That said, there is clearly a long way to go. The UK's ECDI now stands at 30 and the ECDI-P at 15, both measures indicating modest outperformance by economic activity in general.

Overall net borrowing is seen at £22.6 billion, up from £15.86 billion in February.

The public sector net borrowing requirement (PSNB) is the difference between the sector's receipts and expenditure and so provides a simple measure of government fiscal policy. In response to the global economic crisis in 2008/09 the UK government introduced a number of measures designed to show the underlying state of public sector finances by omitting temporary distortions caused by financial interventions. It bases its fiscal policy on these measures. To this end, the underlying gauge of government borrowing watched most closely by financial markets is the PSNB-X which takes overall net borrowing (PSNB) but excludes public sector banks.

Changes in public sector finances can be used to determine the thrust of the government's fiscal policy. Generally speaking when the government has a rising deficit (or falling surplus) it is loosening its fiscal stance with a view to boosting economic activity. When its deficit is falling (or surplus rising), fiscal policy is being tightened in order to slow economic growth. However, sometimes changes in government financial positions can be due to factors outside of the government's control and do not signal an explicit shift in policy. This means that great care is needed in interpreting the data.