Alex Kerr, UK economist at Capital Economics, said: “July’s undershoot is not as good as it looks and even if this undershoot persists, the chancellor will probably need to raise taxes by £17 billion to £27 billion at the budget later this year.” He said the undershoot against the OBR forecast was “driven by higher-than-expected self-assessment income tax receipts. But this may just reflect the timing of tax returns being recorded and receipts in August may be weaker than expected.”