According to the report from Office for National Statistics, UK posted a smaller-than-expected budget surplus in July as government expenditure rose, underlining budget constraints on new Prime Minister Johnson as he promises to boost spending ahead of Brexit.

The surplus, excluding state-owned banks, stood at 1.319 billion pounds, compared with 3.562 billion pounds in July 2018. This was well below the median forecast of 2.7 billion pounds.

While most tax receipts were up a little compared with a year ago, government spending was 2.6 billion pounds higher, a 4.2% annual increase. Purchases of goods and services and staff costs drove most of the rise.

For the first four months of the financial year starting in April, Britain has borrowed 16.0 billion pounds, up 60% compared with a year ago although the deficit as a share of the economy remains small compared with a decade ago.