Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The UK borrowed a lower than expected £11.6bn in December, providing a boost for chancellor Rachel Reeves after last year’s tax-raising Budget.
The shortfall between government income and spending was below the £13bn forecast by economists polled by Reuters and was 38 per cent lower than in the same month a year earlier.
Thursday’s figure from the Office for National Statistics comes after Reeves raised taxes again at her November Budget, in part to increase the buffer she has to meet her fiscal rules.
For the first nine months of the fiscal year that began in April, borrowing was £140.4bn, down £0.3bn from the same period in the previous fiscal year.
“Borrowing in December was substantially down on the same month in 2024, as a result of receipts being up strongly on last year whereas spending is only modestly higher,” said ONS senior statistician Tom Davies.
“However, across the first nine months of the financial year as a whole, borrowing was fractionally lower than in the same period in 2024,” he added.
The Office for Budget Responsibility, the UK’s fiscal watchdog, in November raised its forecast for government borrowing for the current fiscal year to £138bn, up £21bn from its previous projection last March, on the back of higher public spending.
This is a developing story