Hammond given boost to Treasury coffers after bumper July surplus

Chancellor Philip Hammond has been given cause to celebrate as official figures showed the UK government logged its largest July surplus in 18 years.

Figures from the Office for National Statistics show public sector net borrowing, excluding state-owned banks, was in surplus by £2 billion in July – £1bn more than the surplus logged in the same month last year.

Economists had been expecting a surplus of £1.1bn.

This was the largest July surplus since 2000.

Government coffers were bolstered by receipts on self- 0 A £2 billion surplus means Philip Hammond can celebrate

assessed income tax, which are usually higher in January and to a lesser extent in July.

The figures also showed the deficit, excluding banks, this financial year to date was £12.8bn, which is £8.5bn less than during the same period in 2017.

That covers the period between April to July this year.

At this rate, the Chancellor could scrap plans for further fiscal tightening over the next two years at the coming autumn Budget, while keeping public finances on track, according to Pantheon Macroeconomics’ chief UK economist Samuel Tombs.

“Public borrowing has remained on a sharp downward trend, creating scope for the Chancellor to pause the fiscal consolidation next year and still meet his self-prescribed targets,” Mr Tombs said.