U.K. Borrowing Figures May Boost Headroom for Tax Cuts

U.K. borrowing figures may offer some fiscal leeway, Investec economist Ellie Henderson writes in a note. July borrowing came in at GBP4.3 billion, below forecasts, and leaving borrowing well below watchdog estimates for the financial year so far, Henderson writes. Ahead of an approaching general election, this arguably increases the government’s headroom for tax cuts, she adds. Nevertheless, some major drains on the public books—such as pensions costs—lie ahead, and the government still has its work cut out to keep its finances healthy, Henderson writes.

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