Government boosted by fall in borrowing in April and May

Theresa May has not had much to cheer in the past couple of months, but she received a modest boost in the form of improved figures for the budget deficit and borrowing.

Office for National Statistics (ONS) figures reveal the government borrowed £16.1bn in April and May, £100m less than in the same two months last year, says the Financial Times.

Forecasts from the Office for Budget Responsibility, on which the state's budgets are based, predicted borrowing would rise over the past two months, meaning the government is well ahead of its targets on the deficit this year.

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The ONS also revised down its estimate for deficit for the whole of last year to £47bn, reducing it from 2.6 per cent to 2.4 per cent.

This year's good start is mostly thanks to higher tax revenues, which rose more than five per cent year-on-year.

In May alone, tax-take jumped £2.6bn, ahead of a £2.2bn increase in spending and driven by a 4.3 per cent increase in VAT to the highest figure for the month on record, say The Guardian and the BBC.

But the FT warns this is not enough to give Chancellor Philip Hammond room for extensive giveaways in his Autumn Budget, not least as various surveys suggest consumer spending could be on the wane, hitting VAT receipts.

It does, however, give him some breathing room as he seeks to chart a path to balancing the budget by the middle of the decade while also honouring pledges to ease up on austerity.