Borrowing at its lowest in 17 years

STATE borrowing is at its lowest level for 17 years, official figures showed yesterday.

The Government borrowed £2.6 billion last month – or £3.5 million an hour – but that’s half of the previous December figure and the lowest for the month since 2000.

That was the last year the Government ran a surplus before thenChancellor Gordon Brown turned on the spending taps and started what is turning into the longest borrowing binge in British history.

Thanks to record VAT receipts and a rebate from the European Union, analysts said borrowing for this year could come in nearly £10 billion under the £49.9 billion predicted in the Budget. This gives Chancellor Philip Hammond some breathing space as he faces calls to spend on areas such as the NHS. Borrowing for the first nine months of the financial year, which started last April, totalled £50 billion, according to the Office for National Statistics.

That was 12 per cent below same period a year earlier.

In a further boost, the pound rose above $1.40 against the US dollar for the first time since the Brexit vote amid renewed confidence in the UK economy. Even the slavishly proBrussels CBI said UK manufacturers were ‘going from strength to strength’ as they step up investment.

Martin Gilbert, chief executive of investment firm Standard Life Aberdeen, said: ‘The economy is probably in better shape than we think.’

There was further good news when Norwegian prime minister Erna Solberg said she would not stand in the way of a bespoke EU-UK trade deal.

Her comments undermine critics who say Britain will have to join Norway in the European Economic Area, which requires continued free movement of people, to preserve strong EU single market access.