UK public borrowing comes in lower than forecast

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UK public sector borrowing was lower than the official forecast in August, adding to pressure on the chancellor to cut taxes ahead of the next general election.

Data published on Thursday by the Office for National Statistics showed that public sector net borrowing hit £11.6bn last month. That was £3.5bn more than in August 2022, but below the £13bn forecast by the Office for Budget Responsibility, the UK fiscal watchdog.

This was on the back of higher central government receipts that came in at £76.6bn in August, £3.1bn more than in the same month last year and £1.2bn above the OBR forecast.

In the first five months of the current fiscal year, borrowing was £69.6bn. That was £19.3bn more than in the same five-month period last year, but £11.4bn less than the £81bn forecast by the OBR.

The figures will be closely watched by Conservative MPs who want to cut taxes. The chancellor is due to give his autumn statement on November 22, with a general election expected next year.

Jeremy Hunt, the chancellor, said: “These numbers show why after helping families in the pandemic we now need to balance the books. That becomes much easier when inflation is under control because higher inflation pushes up interest rates, so we need to stick to the plan to get it down.”

UK prices rose less than expected in August, lowering the annual rate of inflation to 6.7 per cent. The Bank of England is due to announce its latest interest rate decision at midday today.