UK Budget Logs Lowest Deficit For August In 10 Years
September 21 2017 - 3:31AM
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The UK budget deficit decreased to its lowest August level since
2007 on higher sales tax, official data revealed Thursday.
Public sector net borrowing excluding interventions decreased by
GBP 1.3 billion from the previous year to GBP 5.7 billion in
August, the Office for National Statistics reported.
This was the lowest August borrowing since 2007. The deficit was
also well below the expected level of GBP 7.1 billion.
As a result, the budget deficit for the first five months of the
fiscal year fell by GBP 0.2 billion to GBP 28.3 billion. The
government forecast budget deficit of GBP 58.3 billion for the year
ending March 2018.
In August, revenues increased by 3.5 percent year-on-year as VAT
advanced 5.6 percent, which was the highest on record for August.
Due to timing, self assessed income tax fell 1.2 percent.
Meanwhile expenditure dropped 0.1 percent with interest falling
3.8 percent.
Even assuming there is a bit of a deterioration, the Chancellor
is still likely to have some extra money to play with - on top of
the scope already contained within his fiscal mandate, Paul
Hollingsworth, a UK economist at Capital Economics, said.
As a result, some easing back on austerity to help households
struggling in the face of the squeeze on real incomes looks likely,
he noted.
Public sector net debt totaled GBP 1,773.3 billion at the end of
August, which was equivalent to 88.0 percent of gross domestic
product, an increase of GBP 150.9 billion on August 2016.
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