Government borrowing falls on income tax windfall, but pressure on public finances remains

"Government borrowing fell sharply in December after a surge in income tax and national insurance receipts helped narrow the monthly deficit, offering short-term relief for the Treasury but little comfort over the longer-term health of the public finances. Figures published by the Office for National Statistics showed public sector borrowing fell to £11.6 billion in December, £7.1 billion lower than the same month a year earlier, a 38 per cent reduction. The improvement was driven by a strong rise in revenues."

"However, the broader fiscal picture remains stretched. Over the first nine months of the financial year, borrowing totalled £140.4 billion, only £300 million lower than the same period last year and still the third-highest April-to-December borrowing figure since records began in 1993. Public sector debt now stands at 95.5 per cent of GDP, up from 35 per cent before the 2008 financial crisis and 0.9 percentage points higher than a year ago."

Government borrowing fell to £11.6 billion in December, a £7.1 billion (38%) reduction year-on-year, driven by a strong rise in revenues. Total tax receipts rose by £7.7 billion to £94 billion while public spending increased by £3.2 billion to £92.9 billion. Over the first nine months of the financial year borrowing totalled £140.4 billion, only £300 million lower than the same period last year and the third-highest April–December figure since 1993. Public sector debt stands at 95.5% of GDP, 0.9 percentage points higher than a year ago, with £9.1 billion spent on debt interest in December. Tax increases of around £70 billion have not materially reduced borrowing.

Read at Business Matters