Britain's government recorded a smaller budget deficit than expected in the second month of the 2018/19 financial year and borrowed less last year than had previously been reported, official data showed on Thursday.
The deficit in May stood at £5bn, compared with £7bn a year ago, the Office for National Statistics (ONS) said, at the bottom end of the range of economists' forecast in a Reuters poll.
So far this year, the deficit totals £11.8bn, 26 per cent less than in April-May 2017, though it is rarely possible to get a good steer on full-year borrowing trends this early in the financial year.
The figures may still cheer Chancellor of the Exchequer Philip Hammond, who in a speech later on Thursday intends to reaffirm his goal of lowering public debt despite a big rise in health spending announced by Prime Minister Theresa May earlier this week.
Last year, British government borrowing totalled £39.5bn or 1.9 per cent of GDP according to Thursday's figures. This is a downward revision from the ONS's estimate last month of a £40.5bn budget deficit, which is equivalent to 2 per cent of GDP.
Across the nation taxpayers will have to contribute a bit more in a fair and balanced way to support the NHS we all use
This was the lowest annual budget deficit as a share of GDP since 2001/02 and the borrowing is only for long-term investment, not day-to-day spending.
The deficit stood at 9.9 per cent of GDP when Chancellor Hammond's predecessor, George Osborne, took power in 2010 and started a multi-year programme of public spending cuts.
In March, Britain's Office for Budget Responsibility said it expected the shortfall between how much the government spends and how much it earns from tax revenues to fall further this financial year to £37.1bn, or 1.8 per cent of GDP.
But now Hammond will have to fund the start of a £20bn a year increase in spending on England's National Health Service, which May said on Monday she wanted to phase in over the next five years.
May said some money would come from savings on EU membership contributions after Brexit, but other funding would need to come from higher taxes or more borrowing.
The OBR has estimated that Brexit will be a net drain on Britain's public finances, not a benefit, and in speech extracts released on Thursday, Hammond was clear the tax burden would need to rise.
"Across the nation taxpayers will have to contribute a bit more in a fair and balanced way to support the NHS we all use," he plans to say in a major speech in London's financial centre this evening.
He will also reaffirm his commitment to existing fiscal targets.
Britain made more progress on improving the public finances last year than the OBR expected because the economy slowed less than feared after the 2016 Brexit referendum shock.
Hammond wants a budget surplus by the mid-2020s, in order to cut the national debt faster, as he believes debt as a share of GDP is too high to easily support a big rise in spending during a future deep recession.
Public debt stood at £1.781 trillion, or 85.0 per cent of GDP, down from 85.4 per cent of gross domestic product in May 2017 but more than double its level before the financial crisis.
The headline public sector net debt figures are inflated by a temporary Bank of England lending stimulus scheme which is due to be repaid this year - something which makes a near certainty of Hammond's goal to lower debt as a share of GDP.
Stripping out the effect of the BoE scheme, net debt as a share of GDP has been falling slowly since 2014/15 and currently stands at 75.8 per cent of GDP.