UK Borrowing Falls to 11.6 Billion Pounds in December

LONDON — UK government borrowing dropped more than anticipated in December, reaching 11.6 billion pounds as robust tax revenues outpaced a modest rise in spending, according to official data released Thursday by the Office for National Statistics.

The figure marked a 7.1 billion pound decrease from the same month a year earlier and fell short of economists' median forecast of 13 billion pounds. It represented the lowest December borrowing level since 2003, providing early signs of progress in efforts to stabilize public finances under Chancellor of the Exchequer Rachel Reeves.

Tax receipts played a key role in the improvement, climbing 7.7 billion pounds year on year to total 92.6 billion pounds. This surge stemmed from higher collections in income tax, up 2.5 billion pounds; national insurance contributions, which rose nearly 19 percent over the first nine months of the fiscal year following an April increase in employer rates; corporation tax, revised upward by 1.9 billion pounds for earlier months; and value-added tax. Buoyant wage growth and the tax hikes introduced in the October 2024 budget further bolstered revenues, offsetting pressures from areas like support for...