UK July borrowing eases to 1.1 billion, but debt remains high

UK public borrowing slowed sharply in July, easing some political pressure on Chancellor Rachel Reeves as she prepares for the autumn budget. Official figures show the state’s deficit at 1.1 billion for July, 2.3 billion lower than a year earlier and the weakest monthly borrowing in three years. The month contributed to a four-month total of 60 billion for the current financial year, which remains about 6.7 billion higher than the same period last year. The data also point to a higher burden from debt servicing and close attention to future fiscal plans as the government weighs tax and spending decisions.

The month’s receipts rose on the back of stronger tax takes, with central government receipts totaling around 100.1 billion, up by nearly 8.8 billion year on year. National Insurance and other compulsory contributions climbed by about 2.6 billion, while self-assessed income tax receipts rose by roughly 2.7 billion to 15.5 billion. Public spending for July rose to around 92.1 billion, reflecting higher pay and benefits alongside general inflation within departments. Despite the improvement in July borrowing, debt interest payments reached about 7.1 billion, up from the previous...