Data from the Office for National Statistics (ONS) showed Britain borrowed £21.8 billion last month. While that was the second highest September borrowing total since records began in 1993, it was lower than economists had expected. City forecasts had pegged borrowing at £22.6 billion.
The slowdown in borrowing is a minor boost for the Chancellor ahead of next week’s budget. He has serious concerns about health of the economy as debts soar.
The government has borrowed just over £108 billion over the last 12 months as the pandemic has put huge strain on public finances. Public sector net debt now stands at over £2.2 trillion.
Danni Hewson, an analyst at AJ Bell, said: “There’s no doubt things are improving. Borrowing has been falling thanks to an increase in tax receipts as country gets back to work. The problem is there’s still a big gap between income and expenditure and every month is just adding a little more to that debt mountain which now stands at an eyewatering 95.5% of GDP. “
Sunak said: “Our recovery is well underway – with more employees on payrolls than ever before and the fastest forecast growth in the G7 this year – but the pandemic has had a huge impact on our economy and caused our debt levels to rise.
“At the Budget and Spending Review next week I will set out how we will continue to support public services, businesses and jobs while keeping our public finances fit for the future.”
Sunak delivers the government’s budget next Wednesday, 27 October. Experts are expecting few surprises after a major tax announcement on National Insurance outside of the budget. Sunak is also unlikely to deliver many giveaways after spending hundreds of billions of borrowed money to support the economy through the pandemic.
Expected announcements include a cut to the surcharge on bank profits and an extension to government-backed recovery loans for businesses to help them recover from the impact of Covid-19.