UK budget deficit narrows as shoppers boost VAT receipts

Public finances still rising as a proportion of GDP despite unexpectedly strong figures for August

Britain’s public sector spending deficit dropped to its lowest August total since 2007 after an increase in VAT revenues and a squeeze on local authority borrowing.

The deficit in August stood at £5.7bn, down 18% compared with the same month last year, beating forecasts of £7.1bn in a Reuters poll of economists.

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