UK Government Borrowing Drops Unexpectedly

The Office for National Statistics reported that annual government borrowing reached its lowest level in three years, driven by record-high tax receipts that offset increased public spending.

However, the services sector is already showing signs of a slowdown as rising fuel and energy costs impact consumer budgets.

Chancellor Reeves has warned that the 'energy shock' from the Middle East conflict could blow a hole in the government's carefully calculated fiscal headroom.

Business activity remains volatile, with firms rushing to build stocks amid fears of further price hikes.