Government spending moves out of the red
The government's coffers were back in black last month due to a seasonal inflow of income and corporation tax while VAT receipts reached record levels, latest figures show.
Data from the Office for National Statistics shows a surplus on the public sector net cash requirement of £6.4bn in July, a huge swing from Junes shortfall of £10.1bn.
The accruals-based measurement of public sector net borrowing also showed an underlying surplus of £1.5bn. Both figures were much better than city analysts had predicted.
The surplus however is not expected to help chancellor Gordon Brown remain below his projected deficit of £27bn for this year. Indeed figures show that the deficit for the first four months of the year is already £12.6bn, nearly half the forecasted figure.