Government borrowing falls in February

Philip Hammond Image copyright AFP

Government borrowing fell last month to its lowest amount for February in 10 years, according to official figures.

Borrowing, excluding state-owned banks, was £1.8bn, down from £4.6bn a year earlier, the Office for National Statistics said.

In the financial year-to-date, borrowing has fallen by £19.9bn from last year to £47.8bn.

Analysts said the figures meant the government was on track to meet revised borrowing targets.

In the Budget, the Office for Budget Responsibility revised its end-of-year borrowing forecast to £51.7bn, down from its earlier forecast of £68.2bn.

'Fiscal ammunition'

The ONS said corporation tax receipts had risen by 21.3% in the first 11 months of the financial year to just over £50bn, while income from tax and National Insurance contributions rose by 6.5% to £280bn.

Howard Archer, chief UK and European economist at IHS Markit, said Chancellor Philip Hammond was "clearly keen to keep fiscal ammunition up his sleeve - due to the major uncertainties and downside risks that the economy faces as it navigates its way out of the EU".

"Despite the resilience of the economy so far since last June's Brexit vote, the chancellor is very well aware that a challenging road lies ahead," he said.

"Furthermore, an appreciable budget deficit is still seen existing in 2021-22 so there is still work to be done then on getting the public finances back to full health."

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