July borrowing 4.3 bln stg vs Reuters poll 5.0 bln stg
Budget deficit running below official forecast
Income tax receipts rise vs July last year
Government under pressure to cut to taxes
Hunt says he is sticking to his plan

LONDON, Aug 22 Reuters Britain recorded a smallerthanexpected budget deficit in July, official data showed on Tuesday, giving finance minister Jeremy Hunt a bit of hope that he can cut taxes later this year, before an election expected in 2024.

Some economists warned, however, that an economic slowdown or a recession in the coming months, as the Bank of England keeps on raising interest rates to fight high inflation, could deny Hunt the room for manoeuvre for preelection giveaways.

Net borrowing, excluding stateowned banks, stood at 4.3 billion pounds 5.49 billion last month, less than the median forecast of 5.0 billion pounds in a Reuters poll of economists.

In the first four months of the financial year, borrowing stood at 56.6 billion pounds.

That was almost 14 billion pounds more than the same period last year but 11.3 billion less than forecast by the Office for Budget Responsibility OBR whose projections underpin the government39;s fiscal plans.

Hunt and Prime Minister Rishi Sunak have so far resisted pressure from lawmakers within their Conservative Party to cut taxes and boost their chances in the election which opinion polls suggest they will lose.

As inflation slows, it39;s vital that we dont alter our course and continue to act…