Government borrowing was higher than expected at £12.6bn in November as the growth in income tax receipts slowed on the previous month.
Official figures showed that income tax receipts increased by only 1.1%, after several years of consistent 3%-plus growth, to prevent the UK’s budget deficit falling at the pace forecast by City analysts.
Economists polled by Reuters had expected borrowing of only £12.1bn.
But the November borrowing figure was lower than last year’s £13.2bn and put the Treasury on course to meet the Office for Budget Responsibility’s revised target for borrowing by the end of the year.
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The OBR said in March it expected the budget deficit to fall to £55bn, or more than 20% on the previous year, but said in the autumn statement the fall would be more like 10% to £68bn to take account of the Brexit vote shock, which slowed economic growth and reduced the government’s income.
Howard Archer, an economist at IHS Global Insight, said the modest improvement on last year was “reassuring for the chancellor”.
He said: “This is welcome for Hammond as it would have been somewhat embarrassing if the first set of public finance figures after the November autumn statement had immediately put question marks over his new fiscal targets,” he said.
The Office for National Statistics said that excluding the publicly owned banks, figures for the financial year to date – April to November – showed the deficit fell by £7.7bn to £59.5bn, compared with the same eight months in 2015.
via The Guardian
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Alfonso Esparza