Surprise July Deficit Comes as Blow to UK Government

Surprise July Deficit Comes as Blow to UK Government

The UK’s public sector recorded an unexpected deficit in July.

Public sector net borrowing totaled £62 million, according to the Office of National Statistics (ONS).

Even though the deficit was relatively low, it has been normal for July to be a surplus month, as quarterly corporation tax bills and self employed income tax receipts hit the public purse strings.

Markets had expected to see a surplus of £2.5 billion. It is possible though that future revision to data may alter the original findings. Last July was originally declared as a deficit, only for it to be later revised to a £823 million surplus.

Analysts have played down the significance of the deficit. Commerzbank economist Paul Dixon said the figure was “obviously slightly worse than expected. But I think all in all, it’s only a very small deficit.”

The total tax take in July was 3.4 percent higher than the previous July, with significant rises in VAT, national insurance and income tax.

A Treasury spokesman said: “”Strong tax receipts in July confirm that the economy is moving from rescue to recovery,”

“There is still a long way to go as the UK recovers from the biggest economic crisis in living memory, and the government is sticking to the economic plan that has already cut the deficit by a third.”

Ricky Steedman

Ricky worked as an Investigator in the Inland Revenue for over 20 years before founding Steedman & Company in 1987, giving him the experience and knowledge that enabled him to help so many clients over the years.

His appearance on a Channel 4 television programme about the inside workings of Revenue and Customs was watched by 4.1m which sealed his status as one of the most highly respected tax consultants to ever work in Scotland.

Ricky led all tax investigation and COP 9 cases, using his extensive knowledge to help people reach a positive resolution to their situation.

Ricky passed away suddenly and unexpectedly in June 2022 after leaving his indelible mark on the company he founded and headed for over 35 years.