The UK government reported an unexpected deficit of £1.8bn in July, according to the Office for National Statistics. This figure was higher than the zero shortfall anticipated by City economists for a month typically boosted by self-assessment income tax payments.
Public sector borrowing reached £1.8bn last month, despite strong tax receipts. The cumulative deficit for the first four months of the current financial year is £56.7bn, which is £2.3bn above the Office for Budget Responsibility's forecast.
Total public debt now stands at £2.98tn, equivalent to 94% of GDP, marking a £96bn increase from a year ago. Chancellor John Healey is scheduled to announce his first budget on 28 October.
Healey commented on the public finances, stating: “Fiscal discipline is the bedrock of our UK economic stability and national security, which is why we are committed to meeting our fiscal rules, with a buffer against global uncertainties.” He added that the government is “cutting the deficit faster than any other G7 economy.”