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Government borrowing lower than expected in November Government borrowing lower than expected in November
(32 minutes later)
Government borrowing fell in the year to November as more money was raised from taxes and less was spent on the country's debt interest payments, according to official figures.Government borrowing fell in the year to November as more money was raised from taxes and less was spent on the country's debt interest payments, according to official figures.
Borrowing - the difference between spending and tax take - was £11.2bn last month, the lowest November figure since 2021 and lower than economists expected. Borrowing - the difference between spending and tax take - was £11.2bn last month, £3.4bn lower than the same month last year and the lowest November figure since 2021.
Debt interest was down £4.7bn to £3bn, mainly due to lower inflation. Debt interest was down £4.7bn from a year earlier to £3bn, mainly due to lower inflation, the Office for National Statistics (ONS) said.
The Office for National Statistics said the government also spent more cash on public services and benefit payments. Seperate figures from the ONS showed retail sales rose slightly last month, helped by stronger trading at supermarkets.
Economists had predicted borrowing of about £13bn last month and the figure was £3.4bn lower than in November 2023. Borrowing was lower than expected, with economists predicting the figure to be around £13bn.
Ruth Gregory, deputy chief UK economist at Capital Economics, said "Christmas has come early" for Chancellor Rachel Reeves, with borrowing "undershooting" economists' expectations. Ruth Gregory, deputy chief UK economist at Capital Economics, said "Christmas has come early" for Chancellor Rachel Reeves due to borrowing "undershooting" expectations.
But she added while the Chancellor would be encouraged by the latest figures, "weakening" in the UK economy meant there was a "growing chance" of further tax hikes or spending cuts.But she added while the Chancellor would be encouraged by the latest figures, "weakening" in the UK economy meant there was a "growing chance" of further tax hikes or spending cuts.
Dennis Tatarkov, senior economist at KPMG UK, added the government had some "temporary respite" due to lower interest repayments, but warned the trend was "unlikely to last as actual and projected inflation has moved up in recent months".
Darren Jones, Chief Secretary to the Treasury, said the Labour government had "inherited crumbling public services and crippled public finances".
"Now we have wiped the slate clean, we are focused on investment and reform to deliver growth," he said.
The ONS said retail sales rose 0.2% in November after a 0.7% fall in October.
An increase in sales at supermarkets was partly offset by a fall in clothing sales.
The ONS noted that the survey period for the data did not cover the official Black Friday date of 29 November.