UK Borrowing for May Falls to Lowest in 10 Years

By Wiktor Szary and Toby Luckhurst Features Dow Jones Newswires

U.K. public borrowing fell in May, as value-added tax receipts hit their highest on record for the month, official data showed Wednesday.

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Britain's public borrowing stood at 6.7 billion pounds ($8.5 billion) last month, the Office for National Statistics said. This was slightly lower than the GBP7.1 billion seen in May 2016 and below the forecast of analysts, who expected the borrowing to have increased to GBP7.5 billion.

It was also the lowest borrowing figure for the month since 2007, the ONS said.

The data came amid renewed debate about the U.K.'s long-running program of fiscal belt-tightening, initiated in 2010 by the Conservative government of David Cameron, then prime minister.

A general election earlier this month saw the Conservatives unexpectedly lose their parliamentary majority, with experts saying this was partly due to voters rejecting the party's proposed continued budget cuts.

The party promised in its manifesto to eliminate the budget deficit by 2025, but following the election, Treasury chief Philip Hammond said the government wasn't deaf to Britons' concerns, signaling there was some room for fiscal loosening.

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Nevertheless, Mr. Hammond said the country needed to live within its means and could not finance current spending through borrowing.

The Conservatives are currently attempting to negotiate a deal with Northern Ireland's Democratic Unionist Party that would provide them with the necessary majority to govern.

As the DUP has signaled it preferred a looser attitude to public spending, analysts suggest this could also blunt the edge of proposed cuts.

Write to Wiktor Szary at Wiktor.Szary@wsj.com and Toby Luckhurst at Toby.Luckhurst@wsj.com

(END) Dow Jones Newswires

June 21, 2017 04:53 ET (08:53 GMT)