UK borrowing higher than expected in July

21st Aug 2024 07:15

(Sharecast News) - Government borrowing was higher than expected in July, according to figures released on Wednesday by the Office for National Statistics.

Borrowing came in at £3.1bn, up £1.8bn on July 2023 and £100m higher than the Office for Budget Responsibility was expecting. It was also above the £2.5bn expected by economists and marked the highest borrowing figure for July since 2021.

Cumulative borrowing in the first four months of the fiscal year was £51.4bn. This was £500m less than in the same period a year earlier, but £4.7bn more than the OBR had forecast in March.

Jessica Barnaby, deputy director for public sector finances at the ONS, said: "Revenue was up on last year, with income tax receipts in particular growing strongly.

"However, this was more than offset by a rise in central government spending where, despite a reduction in debt interest, the cost of public services and benefits continued to increase."

Alex Kerr, UK economist at Capital Economics, said: "Overall, today's release highlights the tight fiscal backdrop that the Chancellor faces ahead of her first Budget on 30th October.

"We still think that she will look to raise an additional £10bn a year via higher taxes in the Budget and increase borrowing by around £7bn a year."