LABOUR’S economic strategy came under fresh pressure today after new figures showed that state borrowing has risen by far more than expected.

The official statistics indicate that net borrowing increased to £20.2 billion in March, £1bn more than it was a year earlier. The forecast figure had been under £18bn.

Following on this week’s larger-than-expected hike in inflation, this suggests that Chancellor Rachel Reeves’s plans are not working.

The borrowing surge also sets the stage for a mounting political clash, as back-bench Labour MPs increasingly fear for their seats as a result of Ms Reeves’s austerity plans.

Next month, they are scheduled to vote on planned cuts to disability benefits, with maybe as many as 100 MPs ready to rebel.

Prime Minister Sir Keir Starmer has indicated the possibility of a U-turn on the most controversial cut of all — the means-testing of winter fuel payments to pensioners.

But the latest borrowing statistics will reduce Ms Reeves’s room for manoeuvre, given her repeatedly declared “iron-clad” commitment to the Treasury’s fiscal rules, which mandate the reduction of government debt.

Deputy Prime Minister Angela Rayner has already laid out an alternative plan hinging on a range of tax measures designed to raise revenue from the better-off.

The Chancellor’s deputy, Chief Secretary to the Treasury Darren Jones, blamed the high borrowing figures on the last government. 

“After years of economic instability crippling the public purse, we have taken the decisions to stabilise our public finances, which has helped deliver four interest-rate cuts since August, cutting the cost of borrowing for businesses and working people,” he said.