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London - Britain posted a smaller-than-forecast budget deficit in October as tax receipts jumped, handing a boost to Chancellor of the Exchequer Philip Hammond on the eve of his Autumn Statement.
Net borrowing stood at £4.8bn, down from £6.4bn a year earlier and below the £6bn predicted by economists, Office for National Statistics figures published on Tuesday show. Tax receipts rose 6.8% and government spending grew 2.6%.
The data come as Hammond prepares to announce his mini budget on Wednesday. While the deficit in the current fiscal year may be lower than some economists forecast, the prospect of a Brexit-induced slowdown has led to warnings borrowing could be 100 billion pounds more than forecast over the next five years.
In the first seven months of the current fiscal year, the deficit was £48.6bn down 10% on the year. The Office for Budget Responsibility will publish new forecasts on Wednesday, with economists expecting a significant revision from the £55.5bn it forecast in March.
October is traditionally a strong month for tax receipts, and this year saw corporation tax jump by almost a quarter to £9bn, the highest for any October since 2010. Value-added tax rose 2.8% to the highest for any month on record. Stamp duty on share purchases posted their highest October ever.
The cash measure used to determine debt issuance widened to £55.2bn in the first seven months after posting a surplus in October. It points to a significant overshoot of the full-year forecast of £62.1bn.
Primary dealers surveyed by Bloomberg say the Treasury may need to borrow billions of pounds more than planned this year, though bills, rather than longer-dated gilts, will make up at least half of an increase.
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