UK budget has shock April surplus

Gordon Brown says the UK's finances are in order

The UK has posted a surprise budget surplus for the public sector in April.

The April surplus was £3bn, compared with £1.7bn a year ago, said the Office for National Statistics (ONS).

And the Public Sector Net Borrowing (PSNB) figure, which takes into account capital investment, showed a surplus of £1.39bn, against £859m a year ago.

The Treasury, which has been criticised over the level of public borrowing, said it was "meeting our fiscal rules and will continue to do so".

'Good start'

Public sector net borrowing for the past fiscal year was £38.9bn, higher than the Treasury's £37.1bn forecast.

Chancellor of the Exchequer Gordon Brown has said that borrowing levels will decline to £36bn in the current fiscal year.

"The Chancellor has got off to a good start for the fiscal year," said Philip Shaw, chief economist at Investec.

"But there is still a long way to go in establishing fiscal stability and a tight public spending round next year is needed."

High levels of borrowing may force the government to take unpopular measures, either scaling back on spending plans or raising taxes, as it attempts to keep its finances under control, analysts said.