Government borrowing came in below official forecasts in the first four months of the fiscal year, providing potential room for Chancellor Jeremy Hunt to cut taxes.

The budget deficit between April and July was £56.6bn, the Office for National Statistics said. 

The figure was £11.3bn less than the Office for Budget Responsibility forecast in March.

The deficit in July alone was £4.3 billion, below the the £5bn forecast by economists.

Total debt reached £2.58trn, which is 98.5pc of GDP.

Britain’s debt pile has expanded at a faster pace than any EU country apart from France since the pandemic began, official data shows.

The UK’s government debt has surged from 85.5pc of gross domestic product (GDP) in the last three months of 2019 to 100.5pc in the first three months of this year, a jump of 15 percentage points, the Office for National Statistics said.

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