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The UK budget deficit was the smallest for the month of December in 17 years on credit from the EU and higher value-added tax.
Public sector net borrowing excluding banks decreased by GBP 2.5 billion from the previous year to GBP 2.6 billion, which was the lowest December net borrowing since 2000, data from the Office for National Statistics showed Tuesday.
This decline was caused by a GBP 1.2 billion credit from the European Union. The value-added tax advanced 4.9 percent to record GBP 12.3 billion.
During the current financial year-to-date period, PSNB excluding interventions fell by GBP 6.6 billion to GBP 50 billion. The Office for Budget Responsibility forecasts that PSNB will be GBP 49.9 billion for the financial year ending March 2018.
Latest data provides hope that Chancellor of the Exchequer Philip Hammond could meet the deficit target this year.
Some deterioration in early 2018 still looks in prospect as strong self-assessment tax receipts collected early last year - due to changes in the dividend tax rate - won't be repeated, Ruth Gregory, an economist at Capital Economics, said.
"As such, we doubt that borrowing will come in too much below the OBR's current ?49.9 forecast for the 2017/18 fiscal year," the economist said.
At the end of December, public sector net debt was GBP 1,759.5 billion equivalent to 85.4 percent of gross domestic product.
