Borrowing surges to £22.8bn this year

Government borrowing surged 9 per cent in the four months to July, despite public finances running their first July surplus in 15 years.

The Office for National Statistics (ONS) said public sector net borrowing, excluding public sector banks, increased by £1.9 billion since the start of the current financial year, reaching £22.8bn.

That is despite an increase in tax receipts last month which helped deliver a small surplus of £200 million.

It marked the first July surplus since 2002, according to the ONS, and was driven by an £800myear-on-year increase in receipts from self-assessed income tax to £8.0bn, the highest level on record.

Britain’s finances tend to enjoy a strong July as selfemployed people pay their income tax and businesses settle their tax bills.

But the jump in selfassessment tax receipts last month was down to “unusually low” comparative figures in July 2016, Samuel Tombs of Pantheon Macroeconomics, said.

He said that last year’s deadline for payments fell on a weekend and instead bolstered August figures.

“The first July surplus since 2002 is not a signal that the economy is in rude health,” Mr Tombs said.