The UK government borrowed more than expected in April, underscoring the challenge for Rachel Reeves to fix public services and grow the economy while meeting her fiscal rules.

With the chancellor under pressure on Labour’s tax plans, the Office for National Statistics (ONS) said public sector net borrowing rose to £20.2bn in April, £1bn more than the same month a year earlier and the fourth-highest April borrowing figure on records dating back to 1993. City economists had forecast borrowing of £17.9bn.

In the first month of the new financial year, the figures come after a rise in employment taxes announced by Reeves in her autumn budget, which were enacted in April.

Rob Doody, the ONS deputy director for public sector finances, said: “Receipts were up on last April, thanks partly to the higher rate of national insurance contributions. However, this was outweighed by greater spending, due to rising public services’ running costs and increases in many benefits and state pensions.”

The chancellor has faced growing questions over her tight control of the public finances before next month’s comprehensive spending review, which is expected to outline departmental budgets until the end of the current parliament in 2029.

It emerged on Wednesday that Reeves was urged by the deputy prime minister, Angela Rayner, to consider a series of wealth taxes in last month’s spring statement to raise more revenue to avoid the need for deep cuts to welfare.

The chancellor last month announced cuts to sickness and disability benefits and reductions in overall public spending to help rebuild £9.9bn of headroom against her main fiscal target.

The ONS said it had revised down its borrowing estimate for the 2024-25 financial year by £3.7bn. Total borrowing in the last financial year was £137.3bn, which was £11bn higher than forecast by the Office for Budget Responsibility.

Under pressure to change the approach after disappointing local election results in England, Keir Starmer also confirmed later on Wednesday that his government would loosen eligibility rules for winter fuel payments to pensioners.

After a backlash against the decision to means-test the benefit, the prime minister suggested that a stronger economy had helped to lift pressure on the public finances, enabling the government to partly reverse its position.

However, Reeves will face challenges to manage the public finances as the British economy is rattled by heightened uncertainty facing businesses amid Donald Trump’s increasingly erratic global trade war.

The Office for Budget Responsibility, the independent Treasury watchdog, has warned that the worst-case scenario could reduce UK GDP by as much as 1% and erase Reeves’s headroom.

According to the latest snapshot, public sector net debt, the sum of every annual borrowing figure, was estimated at 95.5% of GDP, one of its highest levels since the 1960s.