The UK government recorded a £1.8 billion deficit in July, confounding economists who had forecast a balanced month and marking borrowing two thirds higher than a year earlier. The Office for Budget Responsibility had predicted a £500 million surplus for the period.
Cumulative borrowing for the first four months of the financial year reached £56.7 billion, running £2.3 billion ahead of OBR forecasts, though that figure remained £6 billion lower than the same period a year earlier. Total public debt stood at £2.985 trillion, equivalent to 94.1% of GDP, while interest payments on government debt rose to £7.7 billion in July.
Chancellor John Healey will deliver his first budget on 28 October, where he must also find an additional £1.2 billion annually to fund a defence investment plan.