UK Government borrowing less than expected in July in boost for Reeves

UK Government borrowing slowed to a lower-than-expected £1.1 billion in July, providing some relief for Chancellor Rachel Reeves in the run-up to the autumn budget.

The Office for National Statistics said the figure, which was £2.3 billion less than the same month a year earlier, is the lowest July borrowing figure for three years.

It came after a rise in self-assessed income tax and national insurance payments helped increase tax receipts for the month.

July borrowing was lower than the £2 billion figure predicted by a consensus of economists.

Borrowing for the first four months of the financial year stood at £60 billion, £6.7 billion more than during the same period last year.

Tax

ONS deputy director for public sector finances Rob Doody said: “Borrowing this July was £2.3 billion down on the same month last year and was the lowest July figure for three years.

“This reflects strong increases in tax and national insurance receipts.

“However, in the first four months of the financial year as a whole, borrowing was over £6 billion higher than in the same period in 2024.”

The figures come after warnings the Chancellor may need to raise taxes again in the budget in order to plug a black hole of up to £51 billion in the public finances.

Costs

Chief secretary to the Treasury Darren Jones said: “We’re investing in our public services and modernising the state, to improve outcomes and reduce costs in the medium term.

“Far too much taxpayer money is spent on interest payments for the longstanding national debt.

“That’s why we’re driving down government borrowing over the course of the parliament – so working people don’t have to foot the bill and we can invest in better schools, hospitals and services for working families.”