The UK public funds improved in July from a very weak studying in June, however the authorities nonetheless borrowed greater than its fiscal watchdog had anticipated over the month.
Public sector internet borrowing got here to £4.9bn final month, an enchancment of £800mn in contrast with July 2021 and much better than the £20.9bn deficit in June.
However the decline between June and July was anticipated as a result of the federal government didn’t have massive debt curiosity payments to pay final month, and the extent of borrowing was nonetheless £200mn larger than forecast by the Workplace for Finances Accountability.
Ministers might be happy that tax receipts held up effectively, with the federal government amassing £78.2bn in revenues in July, which was £6.1bn greater than a 12 months earlier.
Borrowing remains to be anticipated to rise over the 2022-23 12 months as an entire, nonetheless, as a result of excessive inflation has raised the cost of index-linked government debt considerably.
Chancellor Nadhim Zahawi mentioned that prime inflation was “placing stress on the public finances by pushing up the quantity we spend on debt curiosity”.
The Treasury cautioned to not take an excessive amount of consolation from the stronger figures in July in contrast with June, as a result of at a time of elevated inflation there could be vital volatility within the month-to-month knowledge.
