Business World

Monday 11 December 2017

UK deficit falls as stamp duty up 46pc

Andrew Atkinson

Britain's budget deficit narrowed in October from a year earlier as accelerating economic growth boosted sales taxes and stamp duty on property purchases.

Net borrowing excluding temporary support for banks was £8.1bn (€9.7bn) compared with £8.2bn a year earlier, the Office for National Statistics in London said.

Tax receipts increased 3.2pc, with value-added tax rising 6.4pc and stamp duty soaring 46pc. Spending increased 1.2pc.

The figures pave the way for chancellor of the exchequer George Osborne to cut his borrowing projections next month, with a resurgent economy putting the UK on course for its smallest budget deficit in five years. That may allow the Treasury to scale back the amount of gilts it needs to sell to finance its spending.

The deficit in October compared with average forecasts of £7.5bn. The gifting of Royal Mail shares to eligible employees last month added £331m to net borrowing, meaning underlying borrowing was about £7.8bn.

In the first seven months of the fiscal year, the deficit was £64.8bn compared with £70.6bn in the same period a year ago.

If the momentum is kept up, the 2013-14 shortfall could narrow to about £106bn, the least since 2008-09 and down from £115bn a year earlier. In March, the Office for Budget Responsibility predicted a deficit of £120bn, or 7.5pc of gross domestic product.

Mr Osborne will announce new forecasts from the OBR in his Autumn Statement on December 5.

The public finances typically get a boost in October, when onshore companies and oil and gas firms pay instalments of tax on their profits.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business