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UK borrowing falls but Sunak warns “many risks remain”

·1-min read
Government borrowing fell in July compared with a year ago (Jacob King/PA) (PA Wire)
Government borrowing fell in July compared with a year ago (Jacob King/PA) (PA Wire)

THE government borrowed another £10 billion in July to makes end meet, the second highest amount for that month on record.

But the figure was again better than official forecasts had predicted, a pattern that been repeated lately on everything from economic growth to inflation.

That suggests the economy is recovering quickly from the pandemic, albeit with huge scars appearing.

That £10 billion is half what chancellor Rishi Sunak borrowed last July while Covid raged.

He welcomed the figures, but noted: “The last 18 months have had a huge impact on our economy and public finances, and many risks remain.”

The total public debt sits at £2.2 trillion, nearly 99% of GDP, the worst since 1962 when second world war debts buffeted finances.

But in the first four months of the financial year government borrowing has come in about £25 billion lower than predicted.

That gives the chancellor some wiggle-room for the three-year spending review due in October, though it could increase the demands from ministerial colleagues for more cash.

Alison Ring of the Institute of Chartered Accountants said: “While there is borrowing capacity to fund temporary spending needs such as tackling the NHS waiting list backlog, the Chancellor has some very tough decisions to make the public finances more sustainable. It remains to be seen if he can restrain growth in overall public spending and maintain manifesto commitments to not raise the main rates of tax, while delivering on social care reform and other long-term pledges.”

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