Weak UK growth and tax revenues put the squeeze on Hammond

Smaller reduction in June spending deficit will restrict chancellor's budget plans

Weak economic growth and sluggish tax revenues prevented the government from reducing its spending deficit in June by as much as anticipated, squeezing the chancellor's ability to revive ailing public services in the autumn budget.

City analysts expected the deficit to decline by more than 1bn compared with June 2017, following a steep fall in interest payments on the government's total debt bill and a cut in EU budget contributions the Treasury sends to Brussels.