Borrowing boost for Chancellor as tax receipts rise
Public sector net borrowing was £5 billion year on year in May.
Chancellor Philip Hammond has been given a boost after official figures showed Government borrowing declined in May, helped by higher tax receipts.
Public sector net borrowing was £5 billion year on year in May, down from to £7 billion, the lowest since 2005, the Office for National Statistics (ONS) said.
Borrowing in the current financial year to date was £11.8 billion, a total of £4.1 billion less than in the same period in 2017.
The figure is the lowest year-to-date net borrowing since 2007.
The ONS also revised down borrowing for the year to the end of March to £39.5 billion from £40.5 billion, the lowest figure in 11 years.
“Central government tax receipts rose by just 3% year over year in April, below the 3.6% full-year increase predicted by the OBR. Lower-than-anticipated borrowing is not a sign of a healthy economy,” he said.
Public sector net debt totalled £1.78 trillion at the end of May, equivalent to 85% of gross domestic product.
Howard Archer, chief economic adviser to the EY Item Club, added: “The lower May deficit boosts hopes that the economy has gained significant momentum in the second quarter after a poor first-quarter performance which was seemingly only partly due to the severe weather in late February and March.”
