Will the government have room for tax cuts before an election? Politically, it’s thought to be non-negotiable that they must. Having put the tax burden on course for a post-war high by the end of this Parliament, Rishi Sunak and Chancellor Jeremy Hunt are going to have to relieve some of that pressure on taxpayers before going head-to-head with Labour next year. But will the public finances allow for it?
On the surface, today’s update from the Office for National Statistics (ONS) appears to offer up some good news: public sector net borrowing in August came in at £11.6 billion. That’s £3.5 billion higher than August 2022, but £1.4 billion below the Office for Budget Responsibility’s (OBR) latest forecast. Overall, the Treasury has borrowed £11.4 billion less since the start of the fiscal year than the OBR forecast.
At the same time, more money is coming in. Central government receipts in August came to £76.6 billion – £1.2
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