2017.10.2222:24:00UTC+00U.K. Budget Deficit Declined in September

Britain's budget deficit dropped in September, supported by strong growth in income and sales taxes.

The shortfall narrowed in September to its lowest level for that month in a decade, which underlines the latest trend that could provide UK Chancellor Philip Hammond with fiscal room when he announces the Autumn Statement in November.

Public sector net borrowing, excluding banks, stood at £5.9 billion, lower from £6.6 billion the previous year and the smallest for the month in a decade, according to the Office for National Statistics.

Receipts rose 3.4 percent year-on-year, with income tax higher by 3.2 percent and value-added tax climbing 3.6 percent. There was a 20 percent rise in stamp duty on property transactions.

For the fiscal year that started in April 2017, net borrowing is down £2.5 billion to £32.5 billion, marking the lowest year to date level since 2007.

The ONS highlighted that the Office for Budget Responsibility has forecast that public sector borrowing will be £58.3 billion in the current fiscal year, higher by £12.6 billion from 2016.

According to the U.K. Treasury, the government has made “great progress” on the shortfall, but more needs to be done in order to reduce borrowing.

The Office for Budget Responsibility will update the figures in November.

The recent fiscal report showed income added 3.8 percent in the April-September period. In the six months, debt payments increased by nearly 16 percent due to quicker inflation pulling up the cost of servicing index-linked government bonds.