UK public sector borrowing was lower than the official forecast in August, which could give the chancellor more wriggle room to lower taxes ahead of the next general election.
Figures from the Office for National Statistics (ONS) showed that public sector net borrowing was £11.6 billion last month, £3.5 billion more than in August 2022, but below the £13 billion forecast by the Office for Budget Responsibility (OBR).
It was still the fourth-highest August borrowing since monthly records began in 1993, the ONS said, and higher than borrowing of £11.1 billion predicted by economists.
Central government’s receipts were £76.6 billion, £3.1 billion more than in August 2022 and £1.2 billion more than the £75.4 billion forecast by the OBR.
Self-assessed income tax payments for July and August combined to £13.3 billion, £1.7 billion more than in the same two months in 2022 and £0.9 billion more than the £12.4 billion forecast by the OBR.
Despite the figure, the EY ITEM Club said “higher interest rates and probable growth downgrades in the OBR’s next economic forecast mean the chancellor still faces significant challenges in meeting his medium-term fiscal rules, limiting room for any ‘giveaways’ in November’s Autumn Statement”.