UK Government Borrowing Falls to Lowest Level Since 2008 Crisis

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

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza