The chancellor has cause for optimism and can increase spending, according to an assessment of the latest government finance data.
The estimated budget deficit for 2018/19 was this week revised down slightly to £23.5bn, just over 1% of GDP as compared to its post-financial-crisis peak of almost 10% of GDP in 2009/10.
This is the lowest budget deficit for 17 years due to strong income tax receipts and rising earnings growth and employment, and reflects relatively buoyant income tax receipts last year as employment
John Hawksworth, chief economist at PwC, said: “The data confirm that the public finances are back in decent shape after nine years of austerity.
“This should give the chancellor some room for manoeuvre in his Budget and Spending Review later this year.”
