UK borrowing fell to £24.3bn last month, £19.4bn lower than the same month in 2020, however it was still the second-highest May borrowing since records began, the Official for National Statistics (ONS) said.

Income was up by £7.5bn compared to the same time last year, helped along by increases in fuel duty and stamp duty income.

Meanwhile, furlough costs were down as people returned to work. Central government spent £2.5bn on the Coronavrius Job Retention Scheme in May 2021, £7.6bn or 75% less than in May 2020.

The ONS estimates that public sector borrowing in the financial year ending March 2021 was £299.2bn, the highest since the end of World War Two.

Paul Craig, portfolio manager at Quilter Investors, said: “The level of borrowing may indeed have fallen on last month, but we are still well away from ‘normal’ levels and May’s additional £24.3bn of public sector net borrowing makes the black hole that little bit bigger.

“We’re already seeing the public finances infuse political debates on various spending packages, not least around the future funding of social care, and the tussle between Number 10 and Number 11 will become a tug of war with every additional billion added to the Exchequer’s books. Levelling-up and achieving net zero will not come cheap, but ‘no’ seems to be the current answer when the Prime Minister asks the bill payers permission.”

Danni Hewson, financial analyst at AJ Bell, added: “The pandemic has left big scars on the nation’s finances and reopening is a salve but one that needs careful application. Too much, too soon and those inflation worries that have caused so much concern will come to bear. Not enough, too slow, or if variants demand another reverse then there will be difficult conversations about spend vs taxation.

“But today feel like a glass half full day, more income, less spend and a gentle foot on the accelerator.”