LONDON: British government borrowing is projected to decline year-on-year despite a surge in October, official data showed on Tuesday, giving a boost to Finance Minister Jeremy Hunt on the eve of a major budget update.
Public sector net borrowing reached 98.3 billion pounds (US$123.2 billion) in the seven months to October, the Office for National Statistics (ONS) said in a statement.
This was below the fiscal watchdog Office for Budget Responsibility (OBR)’s forecast of £115.2 billion, but £21.9 billion more than the same period a year earlier.
The ONS also revealed that borrowing reached £14.9 billion in October, up £4.4 billion from a year earlier, due to rising profits and interest payments.
It was the second-highest October borrowing since monthly records began in 1993 and exceeded the OBR forecast of £13.7 billion.
Chancellor of the Exchequer Hunt’s budget update, or Autumn Statement, is due on Wednesday and could determine his Conservative government’s re-election chances – or the size of its defeat.
The party is lagging badly in the elections held ahead of next year’s general elections.
“October’s public finance figures will not stop the Chancellor from delivering a pre-election fiscal bonanza,” said Ruth Gregory, analyst at Capital Economics.
“Cumulative borrowing over the first seven months of the financial year is still £16.9 billion less than the OBR expected at this level.”
The ONS said on Tuesday that public sector net debt at the end of October totaled 2.64 trillion pounds, or about 97.8 percent of Britain’s annual gross domestic product.
This was 2.3 percentage points higher than a year earlier and remains at levels seen in the early 1960s.
“The October figures are a timely reminder that the work of restoring public finances to sustainable levels is far from done,” warned Pantheon Macroeconomics analyst Samuel Toombs.
led Britain’s Conservative government Prime Minister Rishi SunakWednesday’s fiscal plans are expected to narrow the gap with the main opposition Labor Party, which is led by Keir Starmer.
Sunak was encouraged by news last week that Britain’s inflation slowed sharply to 4.6 percent in October, from 10.1 percent in January.
Yet the rate remains the highest among the G7 world’s richest nations, with Britain beset by a cost-of-living crisis.
“We have delivered on our pledge to halve inflation but we must continue to support the Bank of England to get inflation down to 2.0 per cent,” Hunt said in response to Tuesday’s data.
“It means being responsible for the country’s finances.
“In my Autumn Statement tomorrow, I will focus on how we boost business investment and get people back to work to deliver the growth our country needs.”
Public sector net borrowing reached 98.3 billion pounds (US$123.2 billion) in the seven months to October, the Office for National Statistics (ONS) said in a statement.
This was below the fiscal watchdog Office for Budget Responsibility (OBR)’s forecast of £115.2 billion, but £21.9 billion more than the same period a year earlier.
The ONS also revealed that borrowing reached £14.9 billion in October, up £4.4 billion from a year earlier, due to rising profits and interest payments.
It was the second-highest October borrowing since monthly records began in 1993 and exceeded the OBR forecast of £13.7 billion.
Chancellor of the Exchequer Hunt’s budget update, or Autumn Statement, is due on Wednesday and could determine his Conservative government’s re-election chances – or the size of its defeat.
The party is lagging badly in the elections held ahead of next year’s general elections.
“October’s public finance figures will not stop the Chancellor from delivering a pre-election fiscal bonanza,” said Ruth Gregory, analyst at Capital Economics.
“Cumulative borrowing over the first seven months of the financial year is still £16.9 billion less than the OBR expected at this level.”
The ONS said on Tuesday that public sector net debt at the end of October totaled 2.64 trillion pounds, or about 97.8 percent of Britain’s annual gross domestic product.
This was 2.3 percentage points higher than a year earlier and remains at levels seen in the early 1960s.
“The October figures are a timely reminder that the work of restoring public finances to sustainable levels is far from done,” warned Pantheon Macroeconomics analyst Samuel Toombs.
led Britain’s Conservative government Prime Minister Rishi SunakWednesday’s fiscal plans are expected to narrow the gap with the main opposition Labor Party, which is led by Keir Starmer.
Sunak was encouraged by news last week that Britain’s inflation slowed sharply to 4.6 percent in October, from 10.1 percent in January.
Yet the rate remains the highest among the G7 world’s richest nations, with Britain beset by a cost-of-living crisis.
“We have delivered on our pledge to halve inflation but we must continue to support the Bank of England to get inflation down to 2.0 per cent,” Hunt said in response to Tuesday’s data.
“It means being responsible for the country’s finances.
“In my Autumn Statement tomorrow, I will focus on how we boost business investment and get people back to work to deliver the growth our country needs.”
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