Britain ran a smaller than expected budget deficit last month but borrowing in the financial year to date rose by more than a quarter, Reuters reported.
Public sector net borrowing in August stood at £6.4 billion excluding public-sector banks, down from £6.917 billion in August 2018 and below economists’ average forecast of a £7.15 billion deficit in a Reuters poll.
Driving the improvement in the budget deficit was a pick-up in self-assessment income tax receipts which stood at £1.7 billion, which is an increase of £0.4 billion on August 2018 according to the latest Office for National Statistics (ONS) data on UK finances.
In July the Britain’s Office for Budget Responsibility forecast predicted borrowing could jump by £30 billion a year by 2020/21 if Britain leaves the EU without a transition deal on 31 October increasing the risk of a recession.
The latest figures reflected a change in treatment of student loans by the ONS, which took into account that around half of them will not be repaid.
This added £12.4 billion to the borrowing figures for the 2018/19 financial year that ended in March, the ONS said.
The ONS estimated the deficit excluding public sector banks for 2018/19 at £41.4 billion rather than 23.6 billion previously (1.9% of GDP instead of 1.1%).
At the end of August 2019, the amount of money owed by the government to the private sector stood at just below £1.8 trillion, which equates to 80.9% of the country's GDP.