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UK borrowed less than predicted this financial year

written by Bella Palmer
uk

Government borrowing between April and October totalled £98.3 billion, the ONS said on Tuesday

Britain borrowed less than predicted by its budget forecasters in the first seven months of the financial year, according to data a day before finance minister Jeremy Hunt is expected to announce some pre-election tax cuts.

Government borrowing between April and October totalled £98.3 billion, the Office for National Statistics (ONS) said on Tuesday.

The data meant borrowing was running nearly £22 billion higher than in the same period in 2022 but around £17 billion less than the Office for Budget Responsibility (OBR) forecast in March, giving Hunt some fiscal room for manoeuvre.

PM Rishi Sunak - who is expected to call an election in 2024 - said on Monday that his focus was turning to tax cuts after a slowing in Britain's high inflation rate and stronger tax revenues.

But Sunak emphasised he would tread carefully to avoid the risk of reviving inflation. He vowed there would be no repeat of last year's promises of huge tax cuts that sent the bond market into a downturn and cost Liz Truss her job as prime minister.

Furthermore, the Office for Budget Responsibility is expected to lower its economic growth outlook on Wednesday, making it harder for the government to meet its target of bringing debt lower as a share of gross domestic in the last year of a five-year forecast period.

The short-term improvement in the fiscal position this year will likely prove unsustainable over the next five years, stated Michal Stelmach, senior economist at KPMG UK.

The prospect of higher interest rates than expected by the OBR in its March forecasts would more than offset any windfall over the medium term, Stelmach said.

Hunt said he would stick to his commitment to being responsible with the nation's finances.

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