UK borrowing hits three-year low

The unexpected drop in borrowing was driven by a significant increase in tax receipts, which more than offset a rise in public spending.

However, economists from the Office for Budget Responsibility warn that this headroom is likely to be temporary as the economic impact of the Iran war begins to manifest.

Higher energy prices and rising debt interest costs are expected to blow a £30 billion hole in future fiscal plans.

The Chancellor now faces a daunting challenge to maintain this progress while navigating a period of mounting geopolitical and economic uncertainty.