LONDON, Jan 22 (Reuters) - Britain's government borrowed less than expected in December but there were signs the economy's weakness was hurting corporate tax receipts, while a pay rise for health workers pushed up spending.
Borrowing excluding public sector-owned banks in December alone fell slightly compared with a year earlier to 4.765 billion pounds, the Office for National Statistics said on Wednesday.
A Reuters poll of economists had pointed to borrowing of 5.3 billion pounds.
Despite the better-than-expected figure for December, borrowing in the first nine months of the financial year stood at 54.6 billion pounds, 7.9% higher than it was for April-December 2018.
The data showed corporate tax receipts for the financial year to date, April to December, were 3.4% lower than at the same point a year ago, the sharpest annual drop since the same period of the 2012/13 financial year.
On the expenditure side, other current spending was up 5.0% in the financial year to date compared with the same period in 2018/19, a record increase that reflects a pay rise for health workers authorized by former prime minister Theresa May.
After nearly a decade of austerity when the budget deficit fell from 10% of national income to under 2%, Britain's Conservative government began last year to loosen the purse-strings, spending more on health care and public-sector pay.
Finance minister Sajid Javid has announced the biggest increase in day-to-day spending in 15 years for the next financial year and has promised to use public investment to help voters in under-performing regions who gave Prime Minister Boris Johnson a thumping election win last month.
Javid will deliver Britain's first post-Brexit budget plan on March 11.
Despite his promises of more funding, especially for infrastructure, Javid has set himself a rule of eliminating the deficit in day-to-day spending within three years which will restrict how much more he can spend on public services.
The ONS said public-sector net debt totaled 80.8% of GDP in December, excluding public-sector banks, or 73.0% once the effect of a temporary Bank of England lending scheme was stripped out.