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Monthly deficit falls to lowest level since financial crash

Monthly deficit falls to lowest level since financial crash
2 min read

Government borrowing fell by £0.3bn in May compared to last year, and to its lowest level since the global financial crash, new figures have revealed.

The Office for National Statistics put public sector net borrowing at £6.7bn, the lowest figure for that month since 2007.

Borrowing for the first two months of the financial year was £0.1bn lower than in 2016 at £16bn, making it the lowest year-to-date net borrowing since 2008.

The body also further revised down the 2016-17 borrowing figure from its initial figure of £52bn at the end of April to £46.6bn.

Public sector net debt was £1,737.3bn at the end of last month, equivalent to 86.5% of GDP and an increase of £121.6bn – or 2.9 percentage points as a ratio of GDP – on May 2016.

A Treasury spokesperson said: “We have reduced the deficit by three-quarters since 2010 but there is still further to go. We are committed to bringing the public finances back to balance by the middle of next decade, building a stronger economy that can deliver higher living standards for people across the country.”

But Shadow Chancellor John McDonnell said: "These figures are a reminder of the chaos and negligence of both Philip Hammond and Theresa May over these past seven years of Tory economic failure; the deficit is still not been cleared as they promised it would be in 2015, and the national debt continues to rise.

"Regardless of their broken promises on the public finances they will continue to pursue a failed policy of austerity while handing out massive tax giveaways to big business and a wealthy few, yet enforcing spending cuts on our public services."

The Office for Budget Responsibility (OBR) has forecast that public sector borrowing will reach £58.3bn over the 2017/18 financial year.

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