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U.K. government borrowing was well below official forecasts in the first five months of the fiscal year, providing a fillip for Chancellor of the Exchequer Rishi Sunak as he prepares for a review of tax and spending next month.
The budget deficit totaled 93.8 billion pounds ($128 billion) between April and August, the Office for National Statistics said Tuesday. That’s 25% under the 125.7 billion pounds predicted by the Office for Budget Responsibility in March. The deficit in August alone stood at 20.5 billion pounds, higher than economists had forecast.
The undershoot for the current year reflects a stronger-than-expected recovery from the coronavirus recession. That may allow the fiscal watchdog to cut borrowing projections for the current fiscal year that ends in March and would give Sunak some fiscal leeway when he presents his budget along with a three-year review of departmental spending on Oct. 27.