Driving the improvement in the public finances last month were strong VAT receipts, which reflected the resilience of consumer spending on the high street Jack Taylor/Getty ImagesGovernment borrowing dropped last month to its lowest level for any August since 2007 as the public finances continued to improve more rapidly than expected. The deficit in August was £5.7 billion, £1.3 billion lower than last year, the Office for National Statistics said and below forecasts of £7.1 billion. For the first five months of the financial year borrowing has fallen by £200 million to £28.3 billion, also the lowest in a decade. If current trends persist economists said that borrowing for the whole of 2017-18 could be as much as £10 billion less than the Office for Budget Responsibility forecast in March. August’s outperformance followed a similar surprise in July, which delivered the first surplus for the month in 15 years.

Source: The Times September 21, 2017 11:03 UTC