Tax revenues offer hope of beating borrowing targets
Wednesday 23 October 2013
Stronger growth is boosting tax receipts and putting the Treasury on course to undershoot official borrowing targets by as much as £10bn this year, official figures suggested yesterday.
Public sector borrowing of £11.1bn in September was £1bn below a year earlier and means the underlying deficit for the first half of the financial year so far stands at £56.7bn, nearly 10 per cent lower than 12 months earlier.
This puts the Chancellor on track to best the Office for Budget Responsibility’s £119.8bn borrowing forecasts for the current financial year, due to be updated in December’s Autumn Statement, reflecting far stronger growth for the economy so far this year.
Martin Beck at the research firm Capital Economics, said “the public finances are now beginning to reap the rewards of a stronger economy”, as the figures showed total current receipts of £281.5bn for the year to date, compared with £260bn last year.
As well as a healthier jobs market, with employment rising to a new record high of nearly 30 million, the Government’s coffers are likely to have been swelled by higher stamp duty revenues, fuelled by initiatives to improve mortgage credit and the Help to Buy scheme to support the housing market.
Rob Wood, the chief UK economist at investment bank Berenberg, said: “Strengthening growth, rising employment and a sharply improving housing market mean there is a decent chance that the fiscal deficit will undershoot official forecasts this year and next, probably by £5bn to £10bn – albeit we can’t get the bunting out just yet because there is still a long way to go. The deficit is still huge, heading for over £100bn again this year.”
The UK’s total debt pile grew to £1.21 trillion, although the first sale of the taxpayer stake in Lloyds Banking Group made a £600m pinprick in the mountain.
Official GDP estimates due on Friday are set to show 0.8 per cent growth over the quarter, the fastest since 2010. The Bank of England’s deputy governor, Charlie Bean, added to the cheer as he said “there are at last signs that a recovery may be gaining traction”. He added that banks were “well placed” to provide the credit to support a recovery, although policymakers remain vigilant over the housing market.
International Women's Day 2014: The shocking statistics that show why it is still so important
Feminist quotes to inspire you on the International Women's Day
Oscar Pistorius trial first week: Never mind a media scrum – murder case becomes bizarre safari following the tracks of a wounded lion
International Women’s Day: 'When a man gives his opinion, he's a man. When a woman gives her opinion, she's a bitch' - feminist quotes from female icons to inspire you
Malaysia Airlines plane: Oil slick is first sign that missing flight crashed into sea killing up to 239 on board
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
- 1 To those who can’t see the point of International Women’s Day: you are the very reason it exists
- 2 International Women's Day 2014: The shocking statistics that show why it is still so important
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Orgasm machine to deliver climax at the push of a button
- 5 Liam Neeson turned down James Bond role because late wife Natasha Richardson said she wouldn't marry him if he took it
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...