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flag UK borrowing dropped 38% in Dec 2025 due to higher taxes and controlled spending, below forecasts.

flag UK government borrowing fell to £11.6 billion in December 2025, a 38% drop from the same month in 2024, driven by an 8.9% year-on-year increase in tax receipts from income tax, corporation tax, VAT, and higher employer national insurance. flag Despite a £3.2 billion rise in public spending due to inflation-linked benefits and pension increases, borrowing remained below forecasts, with the December figure £1.6 billion lower than the OBR’s projection. flag Year-to-date borrowing from April to December totaled £140.4 billion, a 0.2% decrease from the same period in 2024 and £4.1 billion below the forecast, attributed to stronger revenue and controlled spending. flag Officials cited progress in fiscal stability, though analysts warn ongoing pressures from future benefit increases and frozen tax thresholds.

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