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Tax rises ‘virtually inevitable’ after £8bn borrowing blow

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Tax rises are “virtually inevitable” after official figures showed the Treasury has borrowed £8bn more than expected so far this year.

Economists said the Chancellor faced an “uncomfortable” Budget after the Office for National Statistics (ONS) said spending outstripped tax receipts by £18.3bn in August, £3.5bn more than expected.

It means John Healey, the Chancellor, has borrowed £77.3bn so far this financial year, which is £8.1bn more than forecast.

Reacting to the figures, Emma Reynolds, the Chief Secretary to the Treasury, warned of “tough decisions” in Mr Healey’s Budget.

Thomas Pugh, chief economist at RSM UK, said: “The jump in borrowing in August compared to last year sets the stage for what is likely to be a much trickier Budget than Andy Burnham or Healey anticipated when they came to power.

“Another round of tax rises in October now looks inevitable.”

Philip Shaw, an economist at Investec, added: “We suspect that some tax increases are virtually inevitable.”

Ruth Gregory, deputy chief UK…

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