LONDON: Britain recorded a smaller-than-expected budget deficit in July, official data showed on Tuesday, giving finance minister Jeremy Hunt a bit of hope that he can cut taxes later this year, before an election expected in 2024.

Some economists warned, however, that an economic slowdown or a recession in the coming months, as the Bank of England keeps on raising interest rates to fight high inflation, could deny Hunt the room for manoeuvre for pre-election giveaways.

Net borrowing, excluding state-owned banks, stood at 4.3 billion pounds ($5.49 billion) last month, less than the median forecast of 5.0 billion pounds in a Reuters poll of economists.

In the first four months of the financial year, borrowing stood at 56.6 billion pounds.

That was almost 14 billion pounds more than the same period last year but 11.3 billion less than forecast by the Office for Budget Responsibility (OBR) whose projections underpin the government’s fiscal plans.

Hunt and Prime Minister Rishi Sunak have so far resisted pressure from lawmakers within their Conservative Party to cut taxes and boost their chances in the election which opinion polls suggest they will lose.