The government borrowed the least amount of money in three years last month, official figures showed, in a surprise bout of good news for the chancellor.

Not since July 2021, in the midst of the COVID-19 pandemic, was state borrowing so low, according to data from the Office for National Statistics (ONS).

Increases in tax and national insurance receipts meant public sector net borrowing was £1.1bn in July.

That’s less than half the figure (£2.6bn) expected by economists polled by the Reuters news agency.

But borrowing was still £6bn higher in the first four months of the financial year, which started in April, than the same period in 2024.

This breaking news story is being updated and more details will be published shortly.

Please refresh the page for the fullest version.

You can receive breaking news alerts on a smartphone or tablet via the Sky News app. You can also follow us on WhatsApp and subscribe to our YouTube channel to keep up with the latest news.