Mubasher: The UK budget gap shrank in August, but borrowing in the financial year to date expanded, ahead of the planned departure from the European Union (EU).

The UK’s public sector net borrowing, excluding public-sector banks, came in at GBP 6.4 billion ($7.97 billion) last August, declining by GBP 500 million month-on-month, the Office for National Statistics’ (ONS) report showed on Tuesday.

However, borrowing rose by GBP 6.8 billion to GBP 31.2 billion in the five months since the beginning of the current tax year last April.

Public sector net debt, excluding public banks, totalled GBP 1.78 trillion at the end of last month, which was an equivalent to 80.9% of gross domestic product (GDP) rising by GBP 24.5 billion year-on-year, or a fall of 1.5% in the GDP.

At the end of last August, net debt excluding the Bank of England (BOE), rose by GBP 37.4 billion to GBP 1.599 trillion, or a 0.6% decline of the GDP.

Central government net cash requirement came in at GBP 17.9 billion in the current financial year to August, versus GBP 12.7 billion a year ago, the ONS said.

By 8:43 am, the GBP/USD pair went up by 0.10% to $1.2441, while EUR/GBP pair ticked down by 0.07% to GBP 0.8838.