Government borrowing fell to the lowest level since the financial crisis in the year to the end of March as the economy proved more resilient than expected in the aftermath of the Brexit vote.
Borrowing fell by £20bn to £52bn in the 2016-17 financial year after economic growth helped drive tax receipts higher, narrowing the gap between what the government spends and earns.
It was the lowest level of annual borrowing since 2007-08, according to the Office for National Statistics, before the full impact of the financial crisis was reflected in the public finances.
The lower deficit meant the chancellor, Philip Hammond, essentially met his £51.7bn target for borrowing in 2016-17, as outlined by the Treasury’s independent forecaster, the Office for Budget Responsibility (OBR), at the time of the budget in March.
Howard Archer, the chief UK economist at IHS Markit, said the lower deficit would be welcome news for Hammond.
“This is helpful for the chancellor’s and government’s credibility, which is all the more welcome given the looming snap general election,” he said. “Philip Hammond is clearly keen to keep fiscal ammunition up his sleeve – due to the major uncertainties and downside risks that the economy faces as it navigates its way out of the EU.”
via The Guardian
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