THE recent good news on the UK’s deficit turned sour today just weeks after the Chancellor splashed out the proceeds of lower borrowing in the Budget.
The latest public finance figures showed a surprise spike in borrowing last month to £8.8 billion, much bigger than the City expected and the worst October for three years.
The deterioration came as tax receipts slowed but spending surged 6.6% on a year earlier.
The figures are the first since Philip Hammond’s spree unveiled handouts for the NHS as well as tax cuts for more than 30 million people from April next year.
The Office for Budget Responsibility slashed its borrowing target for the current financial year by nearly £12 billion down to £25.5 billion.
Capital Economics UK economist Andrew Wishart said: “This could be a worrying sign for the Chancellor.
“If this trend continues, the giveaways could see him breach his near-term fiscal targets. And if there is a no-deal Brexit, the resulting economic slowdown would probably cause the public finances to deteriorate further.”
