Good news for Philip Hammond ahead of tomorrow's Autumn Statement: government borrowing fell £5.6bn in October, official figures showed today – putting the UK's total borrowing at £48.6bn in the year to the end of October.
Excluding public sector banks, the figure fell £1.6bn to £4.8bn, figures from the Office for National Statistics showed.
The figures are likely to come as a relief to the chancellor, who will deliver his Autumn Statement tomorrow. Over the weekend it was reported forecasts from the Office for Budget Responsibility (OBR) will show the UK will overshoot borrowing forecasts by as much as £7.5bn this year, thanks to reduced tax revenues.
But today's figures showed tax receipts were up 6.8 per cent in the year to October – up on the 5.1 per cent rise expected in the Budget in March.
Income tax receipts grew 7.5 per cent, while corporation tax receipts were up 23 per cent (although Hammond is expected to cut corporation tax).
However, economists still expect borrowing to rise.
"Overshoots earlier in the year mean that borrowing in the first seven months of 2016/17 has been only 10.3 per cent lower than in 2015/16," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
"If that trend continued, borrowing would total £68.1bn this fiscal year, exceeding the March Budget forecast of £55.5bn by £12.6bn.
"The OBR likely will forecast slightly lower borrowing than implied by this trend tomorrow, partly because self-assessment receipts in January and February 2017 should be boosted by about £2.5bn by a swelling of dividend tax payments.
"Even so, the higher than expected starting point for borrowing this year and weaker projections fro GDP growth will compel the OBR to revise up sharply its forecast for borrowing in future years."