July Borrowing Overshoots Forecast, Squeezing Autumn Budget
The government borrowed £1.8bn in July, some £2.3bn more than the official forecast and higher than a year earlier, sharpening the squeeze facing the Chancellor before his first budget. Borrowing over the financial year so far has fallen on last year but remains above forecast, with national debt near 94 per cent of GDP, just under £3 trillion. John Healey said the government was “committed to meeting our fiscal rules”.
July usually flatters the public finances, boosted by self-assessment tax receipts, so an overshoot is an uncomfortable signal for a Chancellor already boxed in by weak growth and rising spending demands. The gap between borrowing and forecast is the figure that matters, because it erodes the headroom against Mr Healey’s fiscal rules and fuels speculation about autumn tax rises. With debt near the size of the entire economy and interest costs elevated, the room for manoeuvre is thin. Every disappointing month sharpens the choice between higher taxes, spending cuts and looser rules. Watch the borrowing trend into the autumn statement.