Government borrowing below forecasts

UK government borrowing almost halved this year.

The number fell £7bn from September last year and was £21.8bn. It is still the second highest amount borrowed in a September since records began.

Borrowing this year has been under the forecasts from OBR. The national debt is now up to £2,218.9bn, which is 95.5% of the UK’s gross domestic product.

“Stronger-than-expected tax receipts continued to account for the bulk of the borrowing undershoot, though spending has also fallen back more quickly than anticipated,” said Martin Beck, senior economic advisor to the EY ITEM Club.

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“In both cases this reflects a much stronger recovery in activity than the OBR’s cautious forecast. These improvements are set to be sustained, and the EY ITEM Club expects full-year borrowing to come in at just over £200bn, well below the OBR’s forecast of £234bn.”

Rishi Sunak commented: “Our recovery is well underway – with more employees on payrolls than ever before and the fastest forecast growth in the G7 this year – but the pandemic has had a huge impact on our economy and caused our debt levels to rise.

“At the Budget and Spending Review next week I will set out how we will continue to support public services, businesses and jobs while keeping our public finances fit for the future.”

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