The UK government borrowed £1.8bn in July, £2.3bn more than official forecasts, as Chancellor John Healey prepares his first Budget, according to BBC reported figures from the Office for National Statistics. Borrowing was two thirds higher than a year earlier, while borrowing in the first four months of the fiscal year reached £56.7bn, also £2.3bn above Office for Budget Responsibility forecasts.

The ONS said the overshoot was driven by higher welfare spending, including benefits and the state pension, even though self-assessed income tax receipts surged and borrowing fell £16bn from June. Healey said the government was cutting the deficit faster than any other G7 economy and would maintain “strong fiscal discipline” at the Budget on 27 October.