The UK's deficit in September decreased by 14.5% compared to the same period in 2014, reaching £9.4bn ($15bn) for the month, the lowest amount since 2007, figures from the Office for National Statistics have shown.
Government pledges to save on Whitehall spending and narrow the deficit showed results. Between January and September, the public sector net borrowing, or the state deficit, was down 13.9% compared to the same months in 2014, at £46.3bn.
The overall debt increased by £78.8bn from the year to September 2014 to £1.638tn, representing 86.3% of the UK GDP. However, Chancellor George Osborne is likely to be pleased with the decrease in deficit in September.
The government's income increased because of a 4.2% jump to income tax-related payment to the state, as wages have edged up, hinting at a strong economic recovery. VAT receipts were up 4.4% to £63.9bn, which suggests that spending on luxury goods and other items were higher than before. Tax income levels were at their highest since records began in 1997.
In terms of spending, government departmental costs were 0.8% higher, adding up to £203bn, and social benefits, mainly consisting of pension payments, edged up slightly as well. The figures follow the budget deficit widening in August. Factory orders fell unexpectedly and public sector net borrowing jumped in August, against all government efforts and promises.
"September's UK public finance figures suggest that last month's disappointing figures were a one-off and show that borrowing is once again coming in well below last year's levels," Capital Economics chief UK economist Vicky Redwood commented.
"Accordingly, the downward trend in borrowing appears to be back on track after a brief wobble last month. Borrowing in the fiscal year so far has totaled £46.3bn, compared to £53.8bn at the same stage last year."
More to follow...