The government borrowed £1.8 billion in July, a month in which the public finances are usually flattered by self-assessment income tax receipts, underlining the scale of the task facing the new chancellor, John Healey, ahead of his first budget.
The Office for Budget Responsibility, the government’s independent fiscal watchdog, had pencilled in a £500 million surplus for the month, while most City economists had expected a flat reading. The figures were published on Friday by the Office for National Statistics.
July borrowing is usually lower than in most calendar months because it includes self-assessment tax receipts. Income tax receipts rose to £17.1 billion last month, up £1.7 billion on a year earlier, and total income taxes were £2.2 billion higher than in the same month last year, at £38.6 billion.
Borrowing in the financial year so far stands at £56.7 billion. That is £6 billion lower than at the same point last year, helped by generally stronger tax revenues in 2026/27, but more than £2 billion above what the OBR had expected. Net borrowing measures the gap between government spending and tax revenue.
The government’s debt pile stands just short of £3 trillion, at 94.1 per cent of gross domestic product, and has fallen by nearly 1 per cent over the year, according to the ONS.
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