UK Government Sees £1.3bn Surplus For July

That represents a drop of 23.3%, or £7.3bn, from the same period past year .

The public finances were boosted by £18.5 billion of income tax receipts – the biggest July intake since records began in 1997 – and up nearly a billion pounds on July 2014’s haul.

Many corporations pay their first company tax instalment on 2015 income in July, whereas self-assessment liabilities are additionally due, often making July the second highest month for receipts through the yr. The ONS stated a discount in central and native authorities internet borrowing of £1.5bn final month additionally helped to push Britain into surplus.

It suggests performance on cutting the deficit is running ahead of the latest independent forecast by the Office for Budget Responsibility (OBR) that it should fall by 21.1% for the full 2015/16 period.

The surplus was the first for the month since 2012, in a sign that the wider economic recovery is finally feeding through into the public finances. That compares with 500 million pounds in the same month previous year .

Capital Economics’ senior UK economist Samuel Tombs highlighted that before the financial crisis, July’s surplus typically stood at around £3bn. Osborne said in his summer budget last month that he wanted to bring down the deficit for the whole of this financial year and the OBR has forecast it will come in at £69.5bn.

Britain’s debt mountain stood at £1.505 trillion in July, or 80.8pc of gross home product (GDP).

The Chancellor said the recovery was “well established” but reiterated with debt at more than 80 per cent of GDP “the job is not done”.

However, with eight months of the fiscal year to go, Tombs cautioned that it was “too soon to conclude that the Chancellor is meeting his fiscal plans with room to spare and could therefore reduce the scale of the austerity measures set to hit the economy”.

David Kern, chief economist at the British Chambers of Commerce, said Osborne could beat his deficit target for this year.

July traditionally sees a surplus thanks to big tax inflows.