UK government borrowing was lower than expected in July, following a rise in tax and National Insurance receipts.
Borrowing – the difference between public spending and tax income – was £1.1bn in July, which was £2.3bn less than the same month last year, the Office for National Statistics (ONS) said.
It was the lowest July figure for three years, the ONS said, following the government’s tax rises in April.
Borrowing over the first four months of the financial year has now reached £60bn, the ONS said, which is up £6.7bn from the same period last year.
That total for the year so far is in line with what the Office for Budget Responsibility (OBR), the official independent forecaster, had predicted in March.
July saw income tax receipts rise by £4.5bn, the ONS said, and there was also an increase from National Insurance (NI) contributions. The rate of employers’ NI contributions was increased by the government in April.
Despite the lower-than-expected borrowing figure for July, Dennis Tatarkov, senior economist at KPMG UK said “longer-term picture for public finances remains challenging”.
“The coming Budget is likely to focus on addressing any potential shortfall against current fiscal targets, which we estimate at £26.2bn. However, the assessment of the shortfall crucially depends on changes to the OBR’s forecast.”
