The UK budget deficit narrowed in September from the last year on higher tax receipts, still this was the second biggest shortfall for the month since the records began in 1993, data published by the Office for National Statistics revealed on Thursday.
Public sector net borrowing excluding public sector banks was GBP 21.8 billion in September, the second-highest September borrowing on record. This was GBP 7.0 billion less than in September 2020.
In the financial year-to-September 2021, PSNB excluding banks totaled GBP 108.1 billion. This was also the second largest financial year-to-September borrowing on record and was GBP 101.2 billion less than in the same period last year.
Further, data showed that public sector net debt excluding public sector banks came in at GBP 2.218 trillion at the end of September, or around 95.5 percent of gross domestic product, the highest ratio since the 98.3 percent recorded in March 1963.
The ONS said the extra funding required by government coronavirus support schemes, combined with reduced cash receipts and a fall in GDP, have all helped to push public sector net debt to the current level.
In September, central government receipts grew 11 percent annually, while expenditure dropped 1.6 percent.
Even though the budget deficit registered its second highest borrowing for September and the public sector net debt ratio the biggest since 1963, the public finances are improving quicker than most expected, Paul Dales, an economist at Capital Economics, said.
But the Chancellor will probably keep a tight grip on the public finances in next Wednesday’s Budget, the economist added.