Widening UK budget deficit hands Hammond a headache

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Rise in public sector net borrowing points to weaker economy than expected and will further limit chancellor’s spending power

Britain’s deficit unexpectedly widened in October, handing Philip Hammond disappointing news on the eve of the budget.

Public sector net borrowing last month, excluding the nationalised banks, grew by £500m to £8bn compared with October a year ago, according to the Office for National Statistics (ONS).

The deficit is the shortfall between government income and spending as measured each month by the Office for National Statistics. Tax receipts make up the vast majority of income, while spending on welfare, schools, healthcare and pensions make up most of its outgoings.

Related: UK budget deficit widened unexpectedly, but factory orders rise – business live

Philip Hammond’s November 2017 budget will reflect the tricky choices facing the chancellor as he seeks to balance the forces pulling him in opposite directions.

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