British government borrowing in the fiscal year just ended nearly matched Chancellor of the Exchequer Gordon Brown's forecast as tax revenues flowed in, official data showed today.
Analysts had predicted a bigger deficit and the figures are sure to be welcomed by the Labour government ahead of a May 5th election as the health of the public finances has become a key issue in the campaign.
The Office for National Statistics said public sector net borrowing for 2004/05 was £34.5 billion as government receipts grew and spending remained restrained in the final months of the fiscal year that ended in March.
That was only £100 million more than Mr Brown predicted in the budget and £1.3 billion less than the prior year.
"The Chancellor's forecast is more or less exactly met, so some good news for the Chancellor," said Alan Castle, UK economist at Lehman Brothers.
But the figures still leave Mr Brown with little room on what analysts say is an already very slim margin to meet his "Golden Rule", which states he may borrow only to invest over the economic cycle.