Surprise borrowing fall buoys Hammond
Chancellor Philip Hammond yesterday received a welcome boost ahead of November’s Budget as figures showed an unexpected fall in government borrowing to its lowest level in a decade last month.
Figures from the Office for National Statistics (ONS) showed borrowing, excluding state-owned banks, dropped in September by £700 million to £5.9 billion compared to the same month last year.
It meant that the UK’S public finances recorded its lowest net borrowing figure since September 2007, while also coming in shy of expectations of £6.7bn.
The outcome means government borrowing for the current financial year also dropped by £2.5bn to £32.5bn – also the lowest level for ten years.
Howard Archer, chief economic adviser for the EY Item Club, said the result delivered “very welcome news” for Hammond as the November Budget looms.
He added: “On the face of it, the much better-than-expected public finances over the first half of 2017-18 gives the Chancellor appreciable room for manoeuvre in November’s Budget.”
The UK government will take some cheer from September’s borrowingfiguresafterdismal analysis from Britain’s fiscal watchdogearlierinthemonth left Hammond grappling with a potential black hole.
The OBR admitted last week that it is set to cut its productivity predictions in November’s forecasts, but Hammond remains on track to undershoot its borrowing forecast of £58.3bn for the current financial year.