LONDON (Reuters) -Britain’s government borrowed less over the first two months of the 2025/26 financial year than official budget forecasters had expected, helped by an influx of taxes paid by businesses after a recent hike in social security contributions.
Official data on Friday showed public sector borrowing for May stood at 17.686 billion pounds ($23.84 billion) in May.
While a Reuters poll of economists showed a median forecast of 17.1 billion pounds, the government has borrowed 37.7 billion pounds over the first two months of 2025/26 – less than the 40.7 billion pounds the Office for Budget Responsibility had predicted.
Friday’s figures from the Office for National Statistics provided an early indication of the impact of a significant increase in employer social security payments – known in Britain as National Insurance contributions (NICs) – which took effect in April and are paid a month in arrears.
A major source of funding for the Labour government’s spending plans, the ONS said compulsory social security contributions in April and May combined were 30.2 billion pounds – a little less than the Office for Budget Responsibility predicted but still a record in cash terms.
Compared with the same period in 2024, social security contributions were up 17.5% – the biggest such rise in three years.
($1 = 0.7447 pounds)
(Reporting by Andy Bruce; editing by William James)
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