Government borrowing shrinks in July 2021

Public sector net borrowing shrunk to £10.4 billion in July 2021, down from the £20.4bn borrowed this time last year, data from the Office for National Statistics (ONS) shows.

The figure is still the second highest for July on record, larger by £11.4bn than the amount recorded in July 2019.

Excluding the £1.7bn borrowed in January, the difference between Government income and spending in July was the lowest yet in 2021, down from the £21.5bn borrowed in June.

The large amount of money borrowed over the past year to finance support such as the furlough scheme and COVID-19 business loans has now pushed the total UK debt to more than £2.2 trillion, about 98.8% of GDP.

The ONS now estimates that the Government borrowed a total of £298bn in the financial year to March, amounting to 14.2% of GDP.

Ruth Gregory, senior UK economist at Capital Economics, said July's borrowing figure was "once again comfortably lower" than the forecast by the Office for Budget Responsibility.

She added:

"Total tax receipts of £70bn in July were above June's £62.1bn and last July's total of £60.6bn, another encouraging sign that the economic recovery is feeding through to the public coffers."

Talk to us about your business.

Join us, we’re social

Click here to follow us on Twitter and Facebook and discover the lighter side of accounting at Lakeview.