Overview
- The Office for National Statistics said on Friday that government borrowing reached £1.8 billion in July, a monthly deficit that surprised forecasters who had expected a balanced month or a small surplus.
- Record self-assessed income tax receipts of about £17.1 billion in July were outweighed by spending rises, with social benefits up roughly £2 billion and goods and services spending up around £1.2 billion.
- Cumulative borrowing for the first four months of the financial year is £56.7 billion, which is £2.3 billion above the OBR’s projection for this point and leaves public debt just under £3 trillion at about £2.98–2.985 trillion or roughly 94% of GDP.
- Ten-year gilt yields have climbed above 5%, raising the government's debt-interest bill and reducing scope for new borrowing, a dynamic that increases pressure on Healey to reconcile spending plans with fiscal rules.
- With the Autumn Budget scheduled for 28 October, ministers face clear choices between higher taxes, tighter spending or constrained new borrowing, decisions that will affect public services, cost-of-living support and how quickly debt costs rise for households.