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UK public finances show government slipping off target

by International Commercial Investment on July 22, 2014


 Today’s public finance figures show the UK government is struggling to bring down the deficit.

Here’s Reuters’ early take:

Britain’s public finances showed a bigger than expected deficit in June, continuing a weak start to the tax year that leaves finance minister George Osborne with a lot of catching up to do to meet his fiscal goals.

The latest figures show the government has so far failed to reduce public borrowing during the first three months of the 2014/15 fiscal year, with less than a year to go before a national election.

The public sector finances, excluding financial sector interventions, showed a deficit of £11.368bn in June, the Office for National Statistics said on Tuesday.This is up from £7.594bn in June 2013 and well above analyst forecasts of a deficit of £10.65bn.

Stripping out the effect of cash transfers from the Bank of England, the 2014/15 deficit to date was £36.1bn, 7.3% higher than at the same point a year ago.

Britain’s government is aiming to get the deficit down to 5.5% of gross domestic product in the 2014/15 fiscal year, from 6.5% of GDP in 2013/14.The ONS said that some factors meant that trends in borrowing in the first three months of this tax year might not be representative of the year as a whole.

The first three months of 2013 saw higher than usual income tax payments, due to tax changes, and there were also receipts from a Swiss tax avoidance deal. Income tax in the first three months of this tax year was 3.5 percent lower than in the first three months of the 2013/14 tax year.

Payments of grants to local authorities also followed a different pattern, an ONS official said.

International Commercial InvestmentUK public finances show government slipping off target