UK Borrowing Overshoots Forecast Before Autumn Budget
The government borrowed £1.8bn in July, some £2.3bn more than the official forecast and higher than a year earlier, official figures showed, underlining 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 is usually a strong month for 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 demands on spending. The gap between borrowing and forecast is the number that matters, because it is what erodes the headroom against Mr Healey’s fiscal rules and fuels speculation about tax rises in the autumn. With debt near the size of the entire economy and interest costs high, 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 and what it signals for the budget.