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| UK borrowed less than expected in July in lift for Rachel Reeves | |
| (30 minutes later) | |
| Public sector net borrowing falls to £1.1bn as chancellor explores tax-raising options in autumn budget | Public sector net borrowing falls to £1.1bn as chancellor explores tax-raising options in autumn budget |
| Business live – latest updates | Business live – latest updates |
| The UK government borrowed less than expected in July, official figures show, in a boost to the chancellor, Rachel Reeves, as she faces pressure ahead of her autumn budget. | The UK government borrowed less than expected in July, official figures show, in a boost to the chancellor, Rachel Reeves, as she faces pressure ahead of her autumn budget. |
| Figures from the Office for National Statistics (ONS) showed public sector net borrowing – the difference between public spending and income – fell to £1.1bn, down by £2.3bn from the same month a year earlier. | Figures from the Office for National Statistics (ONS) showed public sector net borrowing – the difference between public spending and income – fell to £1.1bn, down by £2.3bn from the same month a year earlier. |
| The reading was below City predictions for a deficit of £2.6bn and forecasts from the Office for Budget Responsibility of £2.1bn. | The reading was below City predictions for a deficit of £2.6bn and forecasts from the Office for Budget Responsibility of £2.1bn. |
| Borrowing over the first four months of the financial year so far was £60bn, this was £6.7bn higher than in the same period a year earlier, and the third-highest April-to-July borrowing since monthly records began. | Borrowing over the first four months of the financial year so far was £60bn, this was £6.7bn higher than in the same period a year earlier, and the third-highest April-to-July borrowing since monthly records began. |
| Rob Doody, ONS deputy director for public sector finances, said: “Borrowing this July was £2.3bn down on the same month last year, and was the lowest July figure for three years. This reflects strong increases in tax and national insurance receipts. | Rob Doody, ONS deputy director for public sector finances, said: “Borrowing this July was £2.3bn down on the same month last year, and was the lowest July figure for three years. This reflects strong increases in tax and national insurance receipts. |
| “However, in the first four months of the financial year as a whole, borrowing was over £6bn higher than in the same period in 2024.” | “However, in the first four months of the financial year as a whole, borrowing was over £6bn higher than in the same period in 2024.” |
| Reeves is exploring tax-raising options ahead of a high-stakes autumn budget, as a weak growth outlook, higher debt interest payments and U-turns on welfare cuts put her in danger of breaking her fiscal rules. | Reeves is exploring tax-raising options ahead of a high-stakes autumn budget, as a weak growth outlook, higher debt interest payments and U-turns on welfare cuts put her in danger of breaking her fiscal rules. |
| The UK’s public finances are typically in a strong position in July, owing to a key payment deadline for self-assessed income tax. However, public spending has risen, while weakness in the economy and a cooling jobs market has hit receipts. | The UK’s public finances are typically in a strong position in July, owing to a key payment deadline for self-assessed income tax. However, public spending has risen, while weakness in the economy and a cooling jobs market has hit receipts. |
| Ministers are understood to be exploring options to raise more money from inheritances and property taxation, the Guardian has revealed, amid rising pressure on the public finances. | Ministers are understood to be exploring options to raise more money from inheritances and property taxation, the Guardian has revealed, amid rising pressure on the public finances. |
| However, the chancellor has so far publicly sought to prioritise a focus on turning around the economy to support the government finances, through the allocation of capital investment and a fresh assault on planning regulations to drive up productivity. | However, the chancellor has so far publicly sought to prioritise a focus on turning around the economy to support the government finances, through the allocation of capital investment and a fresh assault on planning regulations to drive up productivity. |
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| Darren Jones, the chief secretary to the Treasury, said: “Far too much taxpayer money is spent on interest payments for the longstanding national debt. | Darren Jones, the chief secretary to the Treasury, said: “Far too much taxpayer money is spent on interest payments for the longstanding national debt. |
| “That’s why we’re driving down government borrowing over the course of the parliament – so working people don’t have to foot the bill and we can invest in better schools, hospitals, and services for working families.” | “That’s why we’re driving down government borrowing over the course of the parliament – so working people don’t have to foot the bill and we can invest in better schools, hospitals, and services for working families.” |