British chancellor Philip Hammon REUTERS/Bobby Yip LONDON — Public sector net borrowing increased by £1.2 billion in April compared to the same time in 2016, the latest figures from the Office for National Statistics released on Tuesday showed.

"Public sector net borrowing (excluding public sector banks) increased by £1.2 billion to £10.4 billion in April 2017, compared with April 2016; this is the highest April borrowing since 2014," the ONS said in a data release.

Economists polled before the release forecast a deficit of £8.9 billion.

While on a monthly basis the deficit increased, the deficit fell on an annualised basis in the financial year ending in March compared to the end of March 2016.

"Public sector net borrowing (excluding public sector banks) decreased by £23.4 billion to £48.7 billion in the financial year ending March 2017 (April 2016 to March 2017), compared with the financial year ending March 2016," the ONS said.

That marks the lowest net borrowing in the UK since March 2008, just before the worst of the financial crisis hit the UK.

The independent Office for Budget Responsibility had forecast a larger deficit, with the ONS noting that it had predicted "that public sector net borrowing (excluding public sector banks) would be £51.7 billion during the financial year ending March 2017."

Here is the ONS' chart of the deficit:

Office for National Statistics

Reducing public sector net borrowing — also known as the deficit — has become perhaps the most important issue in UK economic policy since the financial crisis. Getting rid of the deficit has become something of a political necessity, with a surplus seen as the ultimate goal for the UK's public finances.

In its simplest terms, a government runs a budget deficit when in a single year it collects less in revenues than it spends. Governments must then borrow to make up the shortfall, adding to national debt. Britain has run a deficit every year since 2001-02 when the Labour government created a small surplus. That marks the longest period of continuous deficits since the early 19th century.

All major political parties have pledged to reduce the deficit in their recently released election manifestos.

Alongside the deficit numbers, ONS figures showed that the overall level of government debt continued to rise, hitting £1.722 trillion by the end of April, up £114 billion from the same time last year. Debt is now equivalent to 86% of Britain's GDP.