Overview
- The Office for National Statistics, in figures published on Friday, Aug 21, said the government borrowed £1.8 billion in July when forecasters expected the month to balance or show a small surplus.
- Spending rises drove the gap: social benefits were about £2 billion higher year on year and spending on goods and services, including staff costs, rose roughly £1.2 billion.
- Self‑assessment income tax receipts hit a record July level of about £17.1 billion but did not offset the surge in spending or higher debt interest costs of about £7.7 billion for the month.
- Cumulative borrowing for April–July stood at £56.7 billion, about £2.3 billion above the OBR’s projection for that period, and public sector net debt edged to roughly £2.985 trillion, near 94% of GDP.
- Economists and think‑tanks say the numbers, together with higher gilt yields, have sharply reduced the Chancellor’s headroom and increase the odds that the October Budget will need tax rises, spending cuts, or narrow reprioritisations.