Chancellor gets extra £3bn for budget after VAT error is fixed

Mistakes in recent public finances data mean government borrowing has been overstated by a cumulative £3bn, the Office for National Statistics has said.

- Heather Stewart Economics editor

In a fillip that gives Rachel Reeves a little bit more wriggle room in her November budget, the ONS said its estimates of public borrowing had been out by £200m-£500m a month since January.

While a welcome development for the chancellor, the revision is the latest sign of deep problems with the quality of economic data in the UK that have piled pressure on officials trying to get a clear picture to guide decision-making.

In a notice published yesterday, the ONS blamed a mistake in the VAT receipts data supplied by the tax authorities for the errors in its most recent tax and spending figures, which were published on 19 September.

The mistake means public borrowing for the fiscal year ending March 2025 was £1bn lower than the ONS had previously suggested - and so far this financial year, April-August, it is £2bn lower.