State borrowing halves as UK economy rebounds with £9.5billion higher tax haul compared to July last year while state spending falls by £2.9billion
State borrowing halved last month as the economic rebound boosted tax receipts and cut furlough payments.
The Government borrowed £10.4billion in July – down from £20.5billion in the same month last year, the Office for National Statistics said.
Economic activity was driven up by the lifting of Covid rules, which led to a £9.5billion higher tax haul than last July.
At the same time, state spending fell by £2.9billion, largely because furlough schemes are ending, said the ONS.
However, it was still the second highest borrowing figure for July on record behind last year.
Chancellor Rishi Sunak said: ‘Our recovery from the pandemic is well under way, boosted by the huge amount of support Government has provided'
And in a sign of the damage caused by the coronavirus crisis, the national debt stands at more than £2.2trillion – or £88,000 per household.
The debt burden is now the equivalent of 98.8 per cent of economic output in the UK – the highest since March 1962 when it was 99.5 per cent.
Chancellor Rishi Sunak said: ‘Our recovery from the pandemic is well under way, boosted by the huge amount of support Government has provided.
'But the last 18 months have had a huge impact on our economy and public finances, and many risks remain.’
Britain has now borrowed £78billion in the first four months of the fiscal year.
This is down from £140billion in the same period last year but it remains uncomfortably high for the Chancellor ahead of his three-year spending review this autumn.