The UK budget deficit narrowed more-than-expected in May from the last year as the government receipts increased amid falling expenditure, data from the Office for National Statistics showed on Tuesday.

Public sector net borrowing decreased to GBP 24.33 billion in May from GBP 43.76 billion in the previous year. The deficit was also below the economists’ forecast of GBP 26.1 billion.

Nonetheless, this was the second highest May borrowing since records began in 1993.

At GBP 56.9 billion, government receipts were up GBP 7.5 billion or 15.2 percent, while central government bodies spent GBP 81.8 billion, down 11.7 percent annually.

May’s public finances figures suggest the strong economic recovery is starting to feed through into lower government borrowing, Thomas Pugh, an economist at Capital Economics, said. This reinforces the assessment that the tax hikes and spending cuts that most fear may be avoided.

In the financial year-to-May, PSNB was estimated at GBP 53.4 billion, the second-highest financial year-to-May borrowing since monthly records began in 1993 and was GBP 37.7 billion less than in the same period last year.

Excluding banks, public sector net debt came in at GBP 2,195.8 billion at the end of May, or around 99.2 percent of GDP, the highest ratio since the 99.5 percent recorded in March 1962.

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