Deterioration in public finances in September

THE UK’s public-sector finances deteriorated significantly in September, largely due to a rise in government spending and a fall in income from corporation tax.

The state had to borrow £10.6bn in September, an increase of £1.3bn, or 14.5pc, compared with September 2015. September’s deficit was the first month since August 2015 to see a year-onyear deterioration.

“This is very disappointing news for Chancellor Philip Hammond ahead of the Autumn Statement,” said Howard Archer, chief European and UK economist at IHS Markit.

“While the economy has shown overall resilience following June’s Brexit vote, there clearly has been some slowdown in activity, which is impacting on tax receipts.”

The figures make it unlikely that the Government will hit its £55.5bn borrowing target for the financial year to April 2017. Halfway through, the state has already borrowed £45.5bn