The Office for National Statistics (ONS) said public sector net borrowing, which fills the hole between spending and revenues, fell to £7.4bn in March, down 5.6 percent from a year earlier. But it was more than the £7.1bn economists had been expecting.
Reduced borrowing meant that, for financial year ending March 31, the deficit fell to £87.3bn, comfortably below the latest projection of £90.2bn set out in a forecast by the Office for Budgetary Responsibility (OBR).
The gains were helped along by stronger tax revenues, as income tax jumped £8.1 billion to £169.7bn and corporation tax ticked up £3.0bn to £42.3bn.
"While progress on slowing the rate of borrowing is to be welcomed, it must be remembered that the level of government debt – now standing at more than eighty percent of GDP – continues to rise," the Institute of Directors said.
“All the major political parties have talked about the importance of fiscal responsibility."
"However, they are reluctant to give even the broadest of details about how they are proposing to eliminate the deficit. A mature debate on the sustainable level of public finances should be part at the heart of the election campaign."