By Jason Douglas

 

LONDON--U.K. government borrowing in the first four months of the fiscal year was the lowest in 16 years, helped by the largest surplus for the month of July since 2000.

The figures suggest that Treasury chief Philip Hammond is on track to close Britain's budget deficit within the next few years provided the economy continues to grow.

The U.K. recorded a surplus of 2 billion pounds ($2.55 billion) in July, the Office for National Statistics said Tuesday. A surplus isn't unusual in July as it coincides with an influx of income-tax receipts, but last month's was the largest July surplus for 18 years, the ONS said.

Government coffers also got a boost from higher payroll and corporate taxes than a year earlier, reflecting steady if unspectacular growth in the economy.

Borrowing is forecast to fall again over the full fiscal year thanks to higher tax revenue and a continued squeeze on outlays.

Mr. Hammond has come under pressure from some in his own party to boost public spending after a decade of belt-tightening. However, he has resisted, preferring instead to keep a tight rein on government expenditure with the goal of amassing fiscal firepower to support the economy in the event that the U.K.'s planned exit from the European Union in March 2019 hurts growth.

 

Write to Jason Douglas at Jason.Douglas@wsj.com

 

(END) Dow Jones Newswires

August 21, 2018 04:50 ET (08:50 GMT)

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