Something will have to go wrong in the remaining months of the fiscal year if the Office for Budget Responsibility’s prediction of a near £120 billion budget deficit is to be met. In September public sector net borrowing was £11.1 billion, £1 billion below the September 2012 figure of £12.1 billion.
This continued the recent pattern. So far this fiscal year (April-September) adjusted public sector net borrowing is £56.7 billion, compared with £62.6 billion in the corresponding period of 2012-13. Given that the 2012-13 full-year outturn was £115.4 billion, 2013-14 looks to be heading for something closer to £100 billion than the OBR’s forecast.
Stronger tax receipts reflect faster economic growth. As last month, receipts are growing faster than spending. All the main receipts are growing and in September were up by 7% on a year earlier. In April-September current receipts were up 8.3%, compared with a 2.4% rise in current expenditure. If this trend persists the omens are very good. Morehere.
This piece is cross-posted from EconomicsUK.com with permission.