Public finances continue to leave little wiggle room for Chancellor

There’s little doubt the chancellor will be coming under increasing pressure to yank the magic money tree out from under the stairs and plant it proudly in the garden of Number 11 ahead of the next election.

Borrowing for the year to date has been substantially lower than had been forecast by the OBR thanks to an increasing tax take and falling interest payments as inflation continues to cool.

But spending is still uncomfortably high and with the anniversary of the disastrous mini-Budget just a few days away, there will likely be a reluctance to move away from ultra-prudent policies.

The UK economy is in a pretty fragile state with the Bank of England’s MPC facing one of the most difficult decisions of the last two years when they vote on interest rates today.

Yes, inflation is still falling in spite of rising oil prices, and yes, wage increases have helped push up the tax take which government coffers will have gladly received, but both of those things have the potential to push the Bank’s 2% target even further into the long grass.