Chancellor will have to raise taxes despite lower borrowing, say economists

CHANCELLOR Rachel Reeves will still need to raise taxes in the autumn budget despite lower-than-expected UK Government borrowing last month, economists have warned.

- HENRY SAKER-CLARK

Official figures released yesterday showed that UK state borrowing slowed to £1.1 billion in July, providing some relief for the Chancellor.

The Office for National Statistics said the figure, which was £2.3 billion less than the same month a year earlier, is the lowest July borrowing figure for three years.

It came after a rise in self-assessed income tax and national insurance payments helped increase tax receipts for the month.

July borrowing was lower than the £2 billion figure predicted by a consensus of economists.

Borrowing for the first four months of the financial year stood at £60 billion, £6.7 billion more than during the same period last year.

The figures come amid warnings the Chancellor may need to raise taxes again in the budget in order to plug a black hole of up to £51 billion in the public finances.

It has been reported that the government is looking at hitting owners of high-value houses with capital gains tax (CGT) when they sell their family home.

The Guardian also reported that the government is considering an overhaul of the current system on stamp duty on property purchases.