The UK ran a larger than expected £1.8bn deficit in July, City economists had forecast a shortfall of zero, adding pressure on Chancellor John Healey as he prepares his first budget.
Key facts
- The UK government ran a £1.8bn deficit in July.
- City economists had expected a shortfall of zero for July.
- Total public debt reached £2.98tn, or 94% of GDP, in July.
- Public debt rose by £96bn compared with a year earlier.
- Chancellor John Healey said the government is committed to meeting its fiscal rules.
The UK government ran a larger than expected deficit of £1.8bn in July, according to the Guardian, underlining the challenges facing Chancellor John Healey as he draws up his first budget.
The shortfall was notable because July is typically a month when Treasury receipts are swollen by self-assessment income tax payments. City economists had expected a shortfall of zero for the month, the Guardian reported, making the £1.8bn figure a surprise.
July data also showed total public debt stood at £2.98tn, equivalent to 94% of GDP. That figure was up £96bn on a year earlier, according to the Guardian.
The BBC reported that the UK borrowed more than expected in July as Healey prepares for his first Budget. Responding to the figures, Healey said the government is ‘committed to meeting our fiscal rules’.
The unexpected deficit adds to the pressures facing the chancellor as he finalises his budget plans, with the public finances providing a difficult backdrop to any decisions on spending and taxation.
Why it matters
Public borrowing figures shape the room a chancellor has to spend on services or cut taxes, so an unexpected deficit can constrain budget choices. With Healey preparing his first budget, higher than forecast borrowing signals tighter fiscal conditions that could affect households and businesses.
Frequently asked questions
How large was the UK's July deficit?
The UK government ran a deficit of £1.8bn in July, which was larger than expected. City economists had forecast a shortfall of zero for the month.
What is the UK's total public debt?
According to the Guardian, July data showed total public debt was £2.98tn, or 94% of GDP, up £96bn on a year earlier.
How has Chancellor John Healey responded?
The BBC reported that Healey said the government is 'committed to meeting our fiscal rules'.