Timing is a funny thing. The Chancellor received some good news about the public finances this morning, just when everyone is focused on fairly catastrophic election results for the Tories. A few hours after it was announced that strong Conservative majorities were overturned in the Mid-Bedfordshire and Tamworth by-elections (Katy Balls analyses the results here), we also learned that there may be slightly more scope than previously thought for Jeremy Hunt to come up with some pre-election sweeteners, with the pressure on to cut taxes.
Public sector net borrowing in September came to £14.3 billion – a staggering sum, yes, but £1.6 billion less than in September last year and far below the Office for Budget Responsibility’s (OBR) most recent forecast of £20.5 billion. This week’s borrowing figures came in billions of pounds below what the OBR predicted for the fiscal year. So far into the 2023-24 financial year, the government has borrowed £19.8 billion less than the official forecaster thought it would.
This can be credited to two things: lower than expected debt interest payments and higher than expected tax receipts.
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