State borrowing in the United Kingdom topped forecasts last year, as wages and benefit payments soared, according to official figures that deal a blow to the Conservative government ahead of an election it is tipped to lose.

The government’s public sector net borrowing stood at 120.7 billion pounds ($149.4 billion) in the year to the end of March, the Office for National Statistics (ONS) said Tuesday. The ONS estimated that full-year public sector net borrowing was 7.6 billion pounds less than in 2022-23, but 6.6 billion pounds more than predicted by the U.K.’s official forecaster.

The Office for Budget Responsibility (OBR) had forecast borrowing of 114.1 billion pounds in the year to the end of March.

It comes after borrowing 11.9 billion pounds in March, which is 4.7 billion pounds less than a year ago, but higher than the 10 billion pounds expected by most economists.

Jessica Barnaby, ONS deputy director for public sector finances, said: "Spending was up about 58 billion pounds, with increased spending on public services and benefits outstripping large reductions in interest payable and energy support scheme costs."

Overall, the government debt was around 98.3% of the U.K.’s annual gross domestic product (GDP) in March, around 2.6 percentage higher than a year earlier and remaining at levels last seen in the early 1960s, the ONS said.

A spokesperson for the Treasury said: "Debt increased in recent years because we rightly protected millions of jobs during COVID and paid half of people’s energy bills after (Vladimir) Putin’s invasion of Ukraine sent bills skyrocketing."

He added the government "must stick to the plan to get debt falling." Analysts said they still expected Treasury chief Jeremy Hunt to cut taxes before the election. Prime Minister Rishi Sunak and Hunt have been boosted recently by cooler U.K. inflation.

"We expect the chancellor to cut taxes again before a likely October or November general election despite borrowing overshooting his forecasts," said Rob Wood, an economist at Pantheon Macroeconomics. Polling indicates that the Conservatives are on course to lose to the main opposition Labour Party after 14 years in power.