UK on track to borrow less than projected
The UK government is on track to borrow less than was earlier projected for this financial year, the Office for Budget Responsibility (OBR) said following the publication of the joint statistical bulletin on public finances by the Treasury and Office for National Statistics.
According to the latest data from the Office for National Statistics (ONS), the British government borrowed a total of £49.3 billion between April 2016 and January 2017, the lowest since 2008.
The financial year-to-date borrowing is 22 percent lower compared to figures from the same period in 2015-2016.
The OBR noted that if the government continues to keep borrowing low, the total loaned amount for the year ending March 2017 would be £56 billion, which is £12 billion less than the OBR projected in November. The OBR projected the government’s borrowing to reach £68.2 billion.
The OBR’s mandate is to examine and report on the sustainability of UK’s public finances. As such, it regularly issues analyses on data published by the ONS.
Meanwhile, UK’s finances recorded a £9.4 billion surplus in January, £300 million more than the same period last year.
The month of January typically results in surplus for public finances because it is the time of the year when a large portion of outstanding income taxes are paid. January tax collections have likewise been boosted by corporation tax receipts, but the ONS recently made changes to account for corporation tax payments made throughout the year. This month’s numbers are the first to reflect this change.
For its part, a spokesperson for the Treasury said that it remains committed to returning the public finances to balance, adding that the Treasury is building on their progress over the last six years in bringing down the deficit from 10 percent to 4 percent of the GDP.
Lower government borrowing this year is good news to UK finance minister Philip Hammond as it gives the chancellor some extra wiggle room in the budget, particularly for government priorities like the National Health Service and social care. Hammond is slated to present the budget on March 8th.
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