Chancellor Rachel Reeves faces a 6.7bn challenge ahead of next week's Budget, as high borrowing costs and increased public sector pay strain the UK's finances.
Despite rising tax revenue, increased spending on debt interest and public sector pay has resulted in borrowing rising 1.2bn higher than last year.
The Office for National Statistics reported that the rise in borrowing, primarily due to higher expenditure, comes even after cuts to winter fuel allowances.
Economist Rob Wood suggests that Chancellor Reeves may need to alter her approach to assessing fiscal health, potentially prioritizing liabilities over debt.
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