The UK government is on course to meets it’s borrowing targets as UK records it’s smallest budget deficit for February since 2008.
The Government raised £4.2 billion in self-assessed income tax for the last month, helping borrowing fall by £3.5 billion to £6.9 billion from the same period last year, according to the Office for National Statistics (ONS).
Economists had expected borrowing to come in at £8.4 billion.
The improved figures mean the government borrowed £81.8 billion over the first 11 months of the financial year to bridge the gap between revenues and spending. This is down by £9.7 billon during the corresponding period in 2013/14, helping the Chancellor meet his target to get Britain’s public finances back into the black.
Income tax receipts rebounded sharply from April 2014 to February 2015, and now stand at their highest level since records began in 1997/98 at £153.9 billion, am increase of £7.1 billion from the same period a year earlier.
January and February are traditionally the biggest months of the year for tax receipts as self employed workers and top rate taxpayers make payments for income earned in 2013-14.
Last month saw Britain record its biggest budget surplus since the financial crisis.
The Treasury said the figures showed Britain’s plans for deficit reduction were “working” but warned that Britain was still “borrowing £1 for every £10 we spend and have more to do.”
“Today’s figures show the public finances improved in February by £3.5 billion compared to a year ago, with borrowing in February a third lower than it was this time last year” said HM Treasury.
In his last Budget of the parliament, Chancellor George Osborne promised to use government windfalls from the sale of bank assets and lower debt interest costs to begin paying down Britain’s debt mountain.
But Britain’s debt mountain still rose by £83.6 billion compared with February 2014, and currently stands at £1.46 trillion, equating to 79.6pc of GDP.
The Office for Budget Responsibility forecasts debt levels will finally begin falling in 2015/16.