Whisper it, but Rishi Sunak looks to be heading into the Budget next week with the public finances in a far better state than once predicted. The Office for National Statistics update on public sector net borrowing showed September’s total — £21.8 billion — coming in several billion pounds below the Office for Budget Responsibility’s official forecast and economists’ consensus.
It fits a trend: total borrowing for 2021/22 is over £40 billion lower than expected, giving Sunak far more leeway than he thought he’d have at the start of the year. On the whole, tax receipts have been higher than forecast, as growth (while somewhat lacklustre over the past few months) has broadly been strong, with the UK still in the lead for recovery.
Meanwhile government spending has been lower than expected (the most expensive Covid support scheme — furlough — cost just over £1 billion in its last month, compared to the near-£70 billion it cost overall).
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