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Borrowing undershoots forecasts as July receipts rise
Public sector net borrowing for July was 1.1 billion pounds, below forecasts as self assessment receipts and lower debt costs drive the result.
July borrowing came in lighter than expected as higher tax receipts and lower debt costs trimmed the deficit.
UK borrowing undershoots forecasts as tax receipts rise
Public sector net borrowing in July came in at 1.1 billion pounds, well below economists' forecast of 2.6 billion and the OBR estimate of 2.1 billion. The drop was driven by self assessment receipts, which rose to 15.5 billion pounds, up 2.7 billion on the year. Debt interest costs were also lower than expected, at 7.0 billion pounds. Tax receipts rose to 77.6 billion as income tax and national insurance contributions grew, while total spending increased to 92.1 billion, with higher state pension payments and day-to-day departmental costs linked to inflation.
Key Takeaways
"July numbers show how timing of tax payments can swing the books"
Seasonality in self assessment receipts
"This gives the chancellor room to maneuver before the autumn budget"
Political implications
"Debt costs came in lower than expected"
Financing costs
Taken together, the July data show how much the public purse can swing on the calendar. A stronger self assessment month and lower debt costs reduce the deficit, but they reflect timing as much as policy.
Looking ahead, the figures give the chancellor room to plan the autumn budget. Yet the relief may be short lived if tax receipts cool or debt costs rise, leaving the broader debt path unchanged.
Highlights
- July numbers show how timing of tax payments can swing the books.
- This is a pause not a reset for the public finances.
- Debt costs coming in lower buys time for policy choices.
- The month is not a trend, markets will watch next data.
Budget and political sensitivity
The July numbers touch on a government budget outcome with political implications. A single month of receipts can invite scrutiny from taxpayers, investors and opponents. The longer trend remains unclear.
The fiscal story continues to unfold as receipts shift with the calendar.
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