August saw less borrowing from the public sector in the UK than had been projected. More room for lower taxes?

In August, UK public sector borrowing came in below the official prediction, giving the chancellor additional leeway to cut taxes before the next general election.

Based on data from the Office for National Statistics, public sector net borrowing totalled £11.6 billion last month, which is £3.5 billion more than it did in August 2022 but less than the $13 billion that the Office for Budget Responsibility had predicted.

According to the ONS, it was still the fourth-highest August borrowing since monthly records first started in 1993 and exceeded the borrowing of £11.1 billion that analysts had projected.

The total revenue received by the central government was £76.6 billion, £3.1 billion higher than in August 2022, and £1.2 billion more than the OBR's prediction of £75.4 billion.

A total of £13.3 billion in self-assessed income tax payments were made in July and August, which is £1.7 billion higher than what was paid in the same two months in 2022 and £0.9 billion more than the $12.4 billion OBR anticipated.

The EY ITEM Club said that despite the amount, "higher interest rates and probable growth downgrades in the OBR's next economic forecast mean the chancellor still faces significant challenges in meeting his medium-term fiscal rules, limiting room for any 'giveaways' in November's Autumn Statement."

(Sources: investing.com, proactiveinvestors.co.uk)