UK government borrowing fell more than expected in December, as robust tax receipts aided Chancellor of the Exchequer Rachel Reeves' efforts to manage public finances. The Office for National Statistics reported Thursday that spending exceeded tax revenue by £11.6 billion ($15.6 billion).

The deficit was £7.1 billion less than the previous year and below the £13 billion median forecast from a Bloomberg survey of economists. December's borrowing figure marked the lowest since 2003.

The better-than-expected figures offer a potential boost to Reeves, who is aiming to demonstrate fiscal responsibility ahead of the upcoming general election. Stronger tax revenues, driven by a resilient economy, contributed significantly to the narrowed deficit.

Analysts suggest that the improved borrowing figures could provide the government with some limited fiscal headroom in the upcoming budget. However, they caution that significant challenges remain, including persistent inflationary pressures and the need for sustained investment in public services.

The Office for National Statistics data also revealed that central government receipts were higher than anticipated, reflecting stronger income tax and VAT revenues. Government spending remained elevated, driven by ongoing costs associated with healthcare and social security.

Economists will be closely watching upcoming economic data releases to assess the sustainability of the recent improvement in public finances. The Chancellor is expected to address the latest figures and outline the government's fiscal strategy in the coming weeks.