Public sector net borrowing hit ￡7.8 billion during the month (Image: GETTY)
Public sector net borrowing hit ￡7.8 billion during December, The Office for National Statistics (ONS) figures have shown.
That was ￡8.4 billion less than a year earlier and the lowest in any December since 2019. Experts had expected it to reach ￡11.4 billion.
Following changes to the way students repaid their student loans, the Government thought it would get about ￡10 billion more from people repaying their loans.
The interest that the Government paid on loans was ￡4 billion in December 2023, which is ￡14.1 billion less than a year earlier. That is largely because inflation - as measured by the Retail Prices Index - has dropped from its peak.
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Total net debt was ￡2.69 trillion at the end of the year, which is around 97.7 percent of the size of the economy, or gross domestic product (GDP).
READ MORE: Energy bills, interest rates, inflation and taxes set to plunge
Public sector net borrowing was ￡8.4 billion less than a year earlier and the lowest in any December (Image: Getty)
Despite the fall in net borrowing last month, the debt to GDP ratio is 1.9 percentage points above last December and still at levels not seen since the early 1960s.
Chief Secretary to the Treasury Laura Trott said: "Protecting millions of lives and livelihoods during Putin's energy shock and a once-in-a-century pandemic has created economic challenges.
"However, it is right that we pay back these debts so future generations are not left to pick up the tab.
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"Because of this Government's decisive action, the economy is now beginning to turn a corner. Inflation has more than halved.
"Debt is on track to fall as a share of the economy. And we have been able to afford tax cuts for 27 million working people, and an ￡11 billion tax cut to drive business investment."
The UK government borrowed much less than expected last month, fuelling hopes that chancellor Jeremy Hunt will have room for tax cuts in the spring budget.
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Hunt has previously said that there is “clear” proof that countries with lower tax burdens enjoy higher economic growth, in the biggest hint yet that the Conservative Party is looking to cut taxes ahead of the general election.
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Mr Hunt told The Mail: "My priority in the upcoming spring budget will be to build on our progress and go even further to drive economic growth.
"Because if we can sustainably grow the economy, we can relieve the pressure on families and generate the revenue necessary to invest in the public services we all rely on."
The Chancellor will deliver his next budget on March 6 and hinted there may be cuts in a pre-election autumn statement, saying he plans to put the UK on a long-term “path to lower taxes”.
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