Chancellor Jeremy Hunt’s plans for tax cuts in Wednesday’s autumn statement have been boosted as figures showed Government borrowing was lower than official forecasts in the year to date despite a sharp rise in October.
The Office for National Statistics (ONS) said public sector net borrowing stood at £14.9 billion last month, £4.4 billion more than a year earlier and the second-highest October borrowing since monthly records began in 1993.
It was more than most economists had been pencilling in and higher than the £13.7 billion expected by the UK’s fiscal watchdog, the Office for Budget Responsibility (OBR), marking the first time it has overshot the official forecasts this financial year.
The ONS also revised up borrowing figures for the first six months of the financial year to £83.4 billion from £81.7 billion previously estimated, due largely to weaker income and corporate tax receipts.
But despite the higher-than-forecast figures, financial year-to-date borrowing is still below official forecasts made last March, standing at £98.3 billion, £21.9 billion more than a year earlier, though less than the £115.2 billion forecast by the OBR.
It comes as the Government has set the stage for tax cuts in the autumn statement on Wednesday following intense pressure from within the Conservative Party.
Mr Hunt said: “We met our pledge to halve inflation, but we must keep on supporting the Bank of England to drive inflation down to 2%.
“That means being responsible with the nation’s finances.
“At my autumn statement tomorrow, I will focus on how we boost business investment and get people back into work to deliver the growth our country needs.”