UK budget deficit narrows in May to £6.7bn

The UK's budget deficit narrowed last month, helped by a recovery in value added tax receipts.

The deficit in May stood at £6.7bn, down £300m compared with the same month last year, the Office for National Statistics said.

For the financial year-to-date, borrowing stands at £16.1bn, the lowest since the comparable period in 2008.

The UK has been struggling to fix its public finances since borrowing surged after the global financial crisis.

The public finances were boosted last month by the biggest intake of value added tax receipts for any May on record, after these sales taxes stalled in April.

There have been warnings that the UK economy will slow as negotiations to leave the European Union progress.

Households are already being strained by rising consumer prices after the sharp fall in the pound following last June's Brexit vote.

On Tuesday Chancellor Philip Hammond said that although people are "weary after seven years of hard slog repairing the damage of the great recession", he will stick to the fiscal rules he set out late last year, committing to balance the budget by the middle of the next decade.