ressure on the Chancellor to cut taxes ahead of the next general election ramped up further after figures showed government borrowing came in lower than official forecasts in August.
The Office for National Statistics (ONS) said public sector net borrowing stood at £11.6 billion last month – £3.5 billion more than a year earlier and the fourth highest August borrowing since records began.
It was higher than the £11.1 billion forecast by most economists, but lower than the £13 billion predicted by the UK’s fiscal watchdog, the Office for Budget Responsibility (OBR).
Borrowing for the financial year so far has now reached £69.6 billion – £19.3 billion more than a year ago, but far below the £81 billion forecast by the OBR.
However, the data revealed that borrowing was higher than first thought for the four months of the financial year, with the ONS revising up its estimate to £58.1 billion from the £56.6 billion previous estimate.
Chancellor Jeremy Hunt insisted: “These numbers show why, after helping families in the pandemic, we now need to balance the books.
“That becomes much easier when inflation is under control because higher inflation pushes up interest rates, so we need to stick to the plan to get it down.”
Mr Hunt warned on Wednesday that there will be no pre-election “borrowing binge”, despite saying the Government’s plan to tackle the cost-of-living crisis is working following a surprise fall in inflation to 6.7% in August, down from 6.8% in July.
Such a move would “simply keep interest rates higher for longer”, he said, dealing a blow to Conservatives demanding tax cuts.
He has so far fought off pressure from some Tories – including former prime minister Liz Truss – to pledge tax cuts, repeatedly playing down the prospect of major giveaways in his Autumn Statement, due on November 22.