Data error gives Rachel Reeves an extra £3bn for Budget – but she still has to find up to £40bn
Chancellor given rare boost as VAT error sees £3bn returned to coffers
- Government borrowing estimates have been overstated by a cumulative £3bn, providing Chancellor Rachel Reeves with unexpected fiscal breathing room.
- The Office for National Statistics (ONS) identified the error, attributing it to incorrect VAT receipts data supplied by HMRC.
- Public borrowing for the financial year ending March 2025 is now estimated to be £1bn lower, with the current financial year so far (April-August) £2bn lower.
- The ONS stated that monthly borrowing estimates were out by between £200m and £500m since January.
- This revision comes as the Chancellor prepares for a challenging Budget in November, where she needs to find significant savings and faces pressure over potential tax increases and the two-child benefit limit.