STORY
The UK public finances recorded an unexpected £1.8 billion deficit in July, according to figures from the Office for National Statistics. Economists surveyed by Reuters had expected the public finances to be broadly balanced, while the Office for Budget Responsibility had forecast a £500 million surplus for the month.
The ONS said higher Government spending offset record self assessed income tax receipts. Central Government spending on social benefits was £2 billion higher than in July 2025, while spending on goods and services, including staff costs, increased by £1.2 billion. The deficit for June was revised down from £16 billion to £12.8 billion.
Public sector borrowing reached £56.7 billion during the first four months of the 2026 to 2027 financial year, compared with the £54.4 billion forecast by the OBR. Chancellor John Healey said the Government remained committed to its fiscal rules ahead of the Budget in October.