Commenting on the latest public sector finance figures from the ONS, Yael Selfin, chief economist at KPMG in the UK, said:
“The latest figures add a more positive tone to UK economic data, with July’s public sector finance figures marking the first recorded surplus since 2002. Nevertheless, public sector net borrowing – excluding public sector banks – remains £1.9 billion higher so far this financial year, when compared to a year earlier.
“Higher debt servicing costs, as a result of rising inflation and a slightly frail economy, will put pressure on public finances this year. However, the more challenging environment at present should not prevent the Chancellor from meeting his target of a balanced budget by the mid-2020’s.
“While it would be wise to keep some room for further spending in the event the economy deteriorates more significantly, the Autumn Budget will be an opportunity for the Chancellor to take active steps to recalibrate the economy with a view to making it more productive and resilient. These can include incentives for businesses to increase innovation and their use of technology, as well as on-the-job skills training and peer-to-peer business mentoring.”
Notes to editor:
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