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Government borrowing came in sharply lower than expected last month, boosting the chancellor’s aim of pre-election giveaways in his March budget.
Data from the Office for National Statistics (ONS) showed public sector net borrowing at £7.8bn in December.
That was £8.4bn less than in the same month a year earlier and the lowest in any December since 2019.
Economists had forecast a figure above £11bn but debt interest payments fell by more than expected.
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That was due to October’s sharp drop in the retail price index measure of inflation to which many government bonds are linked.
The cost of servicing student loan debt also fell sharply.
The borrowing sum took the total for the first nine months of the financial year to £119.1bn.
While that figure is £11.1bn up on the April-December period a year earlier, it is almost £5bn less than the Office for Budget Responsibility forecast for the period.
Jeremy Hunt told Sky News last week, while attending the World Economic Forum in Davos, that he wants to cut taxes in his 6 March budget as it would be the quickest route to getting the economy growing again.
The UK, like many of its European rivals, is flat-lining as the effects of inflation and the battle to get the pace of price rises down hold back demand.
The chancellor faces a delicate balancing act as he faces demands from Conservative MPs to bolster the party’s popularity in the run-up to the election, expected later this year.
The UK tax burden is running near highs last seen since the wake of the Second World War but he will be…
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