New UK data shows outlook much better than feared
BRITAIN'S public finances deteriorated much less than feared during the first six months of the current tax year, giving Chancellor George Osborne some hope of meeting his budget goal, even though the economy remains weak.
The key measure of public sector net borrowing used in official forecasts was £2.6bn (€3.2bn) higher than a year earlier for the April-September period, compared to an overshoot of £10.6bn (€13.0bn) previously estimated for April- August, the Office for National Statistics said.
"This is much, much better than they would have thought only a month ago," said Brian Hilliard, economist at Societe Generale. "It's still an overshoot compared to the plans but it does make their life a bit easier."
Until the release of September's data, the government had looked on track for a big overshoot of its 2012/13 goal of reducing public sector net borrowing to £120bn (€147bn), as tax revenues failed to keep pace with government spending.
Public sector net borrowing, excluding the transfer of Royal Mail pension assets, stands at £65.1bn for the first six months of the tax year, compared to £62.4bn at the same point in 2011.
Economists expect the next six months to be more supportive for the public finances, as the economy is forecast to come out of recession.
The new data showed government spending up just 2.1pc, compared to 3pc expected for the year as a whole. (Reuters)