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| UK public finances worse than expected; oil edges higher - live | UK public finances worse than expected; oil edges higher - live |
| (35 minutes later) | |
| 10.27am GMT10:27 | |
| Economist Howard Archer at IHS Global Insight said: | |
| If the pattern of the first 8 months of fiscal year 2015/16 continued over the rest of the year, PSNBex would come in at £81.2 billion. This compares with the target of £68.9 billion contained in November’s Autumn Statement. | |
| The Chancellor now faces a massive task to meet his fiscal targets for 2015.16 and it is frankly hard to see how he can make it –even allowing for the fact that (1) public finances can be volatile from month to month (partly due to the timing of expenditures) and can be revised significantly; and (2) the OBR argues that there should indeed be a substantial improvement in the public finances over the final months of 2015/16 due to a number of factors. This particularly includes an expected jump in self-assessment tax receipts in January resulting from past policy measures. The OBR also expects spending cuts to have an increasing impact as pressure to meet budget targets mounts on departments subject to Treasury controls | |
| 10.24am GMT10:24 | |
| Gradual progress but much more needed is the verdict of David Kern, chief economist of the British Chambers of Commerce: | |
| Although we saw a minor setback in November, gradual progress is being made with reducing the deficit. The public finances are likely to be better this year than in the previous financial year, but the improvement may not be as large as the OBR suggested in the Autumn Statement. | |
| The underlying message remains that our budget deficit is still too high, and greater efforts are needed, through reducing current public spending and generating sufficient tax receipts. | |
| 10.21am GMT10:21 | |
| The UK public finances are not improving as much as hoped, said James Knightly of ING Bank: | |
| UK public sector net borrowing (excluding banking groups ) came in at £14.2bn in November versus expectations of £11.8bn. This is actually higher than in November last year (£12.9bn). While we have to acknowledge there does tend to be a lot of volatility in the month to month figures, the cumulative borrowing fiscal year to date suggests that Chancellor Osborne is going to struggle to hit his target. So far, 2015-16 to date borrowing is at £66.9bn, which is only $6.6bn lower than in in the same period of 2014-15. The OBR’s full financial year forecast is £73.5bn [see earlier] but barring a dramatic improvement in the trend, it is looking likely to be missed by possibly more than £5bn. | |
| In terms of the breakdown, there have been good improvements in tax revenue with full year to date figures showing a 4.6% increase in income taxes, 4.1% improvement in VAT and a 6.4% increase in corporation tax, which is confirmation of the good growth and employment figures we have seen over the year. Stamp duty collection is disappointing though while fuel, alcohol and vehicle duties have shown little change on the year. Overall, central government receipts are up 3.1% full year to date while government expenditure is up 1.2%. Here, we have seen falling debt interest costs, but net investment is up 8.7%, social benefits are up 1% and department spending is up 1.2%. | |
| Things are moving in the right direction, just more slowly than hoped. The new, lower forecast borrowing numbers – a £27bn improvement was announced in the Autumn Statement over the course of the Parliament - look difficult to achieve at this rate. A surplus of 0.5% of GDP in 2019/20 looks a real struggle. | |
| 10.10am GMT10:10 | |
| Here’s a comparison of net borrowing with the forecast from the Office for Budget Responsibility: | |
| The notes in the chart are as follows: | |
| The OBR target of £68.9bn quoted previously takes into account the recent decision to reclassify housing associations as public entities. Excluding that the OBR borrowing figure is £73.5bn, which the one shown in the above chart. | |
| 9.57am GMT09:57 | |
| UK budget deficit = £66.9b, lowest YTD since 2008-9 but not much breathing room for @George_Osborne b4 hits £68.9b target.January key month | |
| 9.53am GMT09:53 | 9.53am GMT09:53 |
| The UK market does not like these borrowing figures. | The UK market does not like these borrowing figures. |
| The FTSE 100, which had earlier climbed as high as 6089, is now marginally in negative territory at 6033. Other European markets have also come off their best levels, to be fair. | The FTSE 100, which had earlier climbed as high as 6089, is now marginally in negative territory at 6033. Other European markets have also come off their best levels, to be fair. |
| 9.49am GMT09:49 | 9.49am GMT09:49 |
| Here’s a chart from the ONS spelling out the debt position: | Here’s a chart from the ONS spelling out the debt position: |
| 9.46am GMT09:46 | 9.46am GMT09:46 |
| The increase in borrowing excluding banks to £14.2bn in November was partly due to £1.1bn of foreign currency fines paid by financial institutions in the previous year which were not repeated, according to the Office of National Statistics. | The increase in borrowing excluding banks to £14.2bn in November was partly due to £1.1bn of foreign currency fines paid by financial institutions in the previous year which were not repeated, according to the Office of National Statistics. |
| For the first eight months of the year, public sector net borrowing was 8.9% lower than the same period in 2014 at £66.9bn. But this is already close to chancellor George Osborne’s target of £68.9bn for the full year. He plans to turn the deficit into a surplus by the end of the decade, but has struggled to make much headway in recent months. | For the first eight months of the year, public sector net borrowing was 8.9% lower than the same period in 2014 at £66.9bn. But this is already close to chancellor George Osborne’s target of £68.9bn for the full year. He plans to turn the deficit into a surplus by the end of the decade, but has struggled to make much headway in recent months. |
| The full report is here. | The full report is here. |
| Updated at 9.54am GMT | Updated at 9.54am GMT |
| 9.33am GMT09:33 | 9.33am GMT09:33 |
| UK borrowing worse than expected | UK borrowing worse than expected |
| Breaking news: | Breaking news: |
| Bad news for chancellor George Osborne. UK public finances have come in worse than expected, with public sector net borrowing excluding banks rising 10.1% in November to £14.2bn compared to a year ago. | Bad news for chancellor George Osborne. UK public finances have come in worse than expected, with public sector net borrowing excluding banks rising 10.1% in November to £14.2bn compared to a year ago. |
| Analysts had been expecting a figure of £11.5bn. | Analysts had been expecting a figure of £11.5bn. |
| 9.26am GMT09:26 | 9.26am GMT09:26 |
| Fastjet, the African focussed airline where Sir Stelios Haji-Ioannou’s easyGroup is a major shareholder, has seen its shares fall nearly 8% after it warned revenues for 2015 and 2016 would be below expectations. | Fastjet, the African focussed airline where Sir Stelios Haji-Ioannou’s easyGroup is a major shareholder, has seen its shares fall nearly 8% after it warned revenues for 2015 and 2016 would be below expectations. |
| It blamed challenging market conditions and currency headwinds for the shortfall. In particular it said the presidential election in Tanzania led to reduced government and civil service traffic, and lower demand for travel generally across the country. | It blamed challenging market conditions and currency headwinds for the shortfall. In particular it said the presidential election in Tanzania led to reduced government and civil service traffic, and lower demand for travel generally across the country. |
| 9.16am GMT09:16 | 9.16am GMT09:16 |
| A quick summary of commodities this year: | A quick summary of commodities this year: |
| Having a look at commodities YTD, WTI and Brent both down >30%, gold & silver down almost 10%...sugar & cotton only majors in +ve territory | Having a look at commodities YTD, WTI and Brent both down >30%, gold & silver down almost 10%...sugar & cotton only majors in +ve territory |
| 9.11am GMT09:11 | 9.11am GMT09:11 |
| After Japan’s Toshiba said it would cut nearly 7,000 jobs after a $1.3bn accounting scandal, Moody’s has cut the company’s credit rating. Moody’s said: | After Japan’s Toshiba said it would cut nearly 7,000 jobs after a $1.3bn accounting scandal, Moody’s has cut the company’s credit rating. Moody’s said: |
| Moody’s Japan K.K. has downgraded Toshiba Corporation’s long-term senior unsecured bond ratings to Ba2 from Baa3. Moody’s has also downgraded Toshiba’s subordinated debt rating to B1 from Ba2, and short-term rating to Not Prime from Prime-3... | Moody’s Japan K.K. has downgraded Toshiba Corporation’s long-term senior unsecured bond ratings to Ba2 from Baa3. Moody’s has also downgraded Toshiba’s subordinated debt rating to B1 from Ba2, and short-term rating to Not Prime from Prime-3... |
| “The downgrades were prompted by Toshiba’s announcement of its structural reform plan and financial forecast for the fiscal year ending 31 March 2016 (FYE3/2016),” says Masako Kuwahara, a Moody’s Vice President and Senior Analyst. “The announcement indicated that earnings and cash flow generation will be significantly below our previous expectations.” | “The downgrades were prompted by Toshiba’s announcement of its structural reform plan and financial forecast for the fiscal year ending 31 March 2016 (FYE3/2016),” says Masako Kuwahara, a Moody’s Vice President and Senior Analyst. “The announcement indicated that earnings and cash flow generation will be significantly below our previous expectations.” |
| “We expect that Toshiba’s leverage will stay high over a prolonged period, given that its restructuring costs will exceed our previous estimates, and our expectation of improvement in earnings, if any, for each business segment will be very gradual even after the restructuring,” adds Kuwahara. | “We expect that Toshiba’s leverage will stay high over a prolonged period, given that its restructuring costs will exceed our previous estimates, and our expectation of improvement in earnings, if any, for each business segment will be very gradual even after the restructuring,” adds Kuwahara. |
| The downgrades also reflect Moody’s concerns of a significant deterioration in the Memories business, which would hinder solid profit contributions. Moody’s points out that Toshiba’s Memories business faces intense global competition, rapid changes in technology, and increasing price pressures. | The downgrades also reflect Moody’s concerns of a significant deterioration in the Memories business, which would hinder solid profit contributions. Moody’s points out that Toshiba’s Memories business faces intense global competition, rapid changes in technology, and increasing price pressures. |
| Moody’s decision to place Toshiba’s ratings on review for downgrade reflects Moody’s concerns over Toshiba’s funding plan for its announced structural reforms and the pressure on its equity from potential further asset write downs. | Moody’s decision to place Toshiba’s ratings on review for downgrade reflects Moody’s concerns over Toshiba’s funding plan for its announced structural reforms and the pressure on its equity from potential further asset write downs. |
| 9.00am GMT09:00 | 9.00am GMT09:00 |
| Next year will see a calmer time in the Greek crisis, according to the Economist’s forecast: | Next year will see a calmer time in the Greek crisis, according to the Economist’s forecast: |
| The World in 2016's forecast for Greece https://t.co/RPj7CHg5Ld pic.twitter.com/yaJHphANsv | The World in 2016's forecast for Greece https://t.co/RPj7CHg5Ld pic.twitter.com/yaJHphANsv |
| 8.54am GMT08:54 | 8.54am GMT08:54 |
| Spanish election uncertainty could damage economic confidence - Fitch | Spanish election uncertainty could damage economic confidence - Fitch |
| Here are the Fitch comments on Spain: | Here are the Fitch comments on Spain: |
| The inconclusive outcome of Spain’s general election increases the related risks of prolonged political uncertainty, and potentially a looser fiscal policy stance and/or a reversal of structural reforms... | The inconclusive outcome of Spain’s general election increases the related risks of prolonged political uncertainty, and potentially a looser fiscal policy stance and/or a reversal of structural reforms... |
| In the short run political uncertainty is likely to have limited impact on fiscal policy as the 2016 budget was approved before the elections. We maintain our baseline assumption that any new government will keep public debt/GDP declining in the latter half of the decade, consistent with eurozone and Spanish fiscal policy rules, although the election increases risks of slippage. But an extended period of political uncertainty and the possibility of a partial reversal of reform and consolidation measures could damage economic confidence and reverse the current benign macro-fiscal dynamics. | In the short run political uncertainty is likely to have limited impact on fiscal policy as the 2016 budget was approved before the elections. We maintain our baseline assumption that any new government will keep public debt/GDP declining in the latter half of the decade, consistent with eurozone and Spanish fiscal policy rules, although the election increases risks of slippage. But an extended period of political uncertainty and the possibility of a partial reversal of reform and consolidation measures could damage economic confidence and reverse the current benign macro-fiscal dynamics. |
| The full report is here: | The full report is here: |
| Fitch: Inconclusive Spain Vote Increases Fiscal, Reform Risks | Fitch: Inconclusive Spain Vote Increases Fiscal, Reform Risks |
| Updated at 8.55am GMT | Updated at 8.55am GMT |
| 8.50am GMT08:50 | 8.50am GMT08:50 |
| The uncertain outcome of the Spanish election may remain uncertain for a while longer, it seems: | The uncertain outcome of the Spanish election may remain uncertain for a while longer, it seems: |
| Don't expect things in #Spain to move fast: #Rajoy is going on holidays tomorrow, according to @ESdiario_com. https://t.co/sB8vy5FRi1 | Don't expect things in #Spain to move fast: #Rajoy is going on holidays tomorrow, according to @ESdiario_com. https://t.co/sB8vy5FRi1 |
| And here’s one impact of the election: | And here’s one impact of the election: |
| #Spain's risk premium over #Italy widens after rating agencies Fitch and Moody's have warned over reform backlash. pic.twitter.com/OJPhxsJR4J | #Spain's risk premium over #Italy widens after rating agencies Fitch and Moody's have warned over reform backlash. pic.twitter.com/OJPhxsJR4J |
| Updated at 8.52am GMT | Updated at 8.52am GMT |
| 8.36am GMT08:36 | 8.36am GMT08:36 |
| Oil could fall $5-$15 when Iran re-enters market - IMF | Oil could fall $5-$15 when Iran re-enters market - IMF |
| Oil prices may be edging higher - Brent crude is currently up 0.8% at $36.67 - but recent weakness has been due to fears of a glut, especially when Iran re-starts exports after sanctions are finally lifted. | Oil prices may be edging higher - Brent crude is currently up 0.8% at $36.67 - but recent weakness has been due to fears of a glut, especially when Iran re-starts exports after sanctions are finally lifted. |
| In a report on Iran, the International Monetary Fund has put a figure on the effect of the country re-entering the oil market: | In a report on Iran, the International Monetary Fund has put a figure on the effect of the country re-entering the oil market: |
| The expected increase in oil supply from Iran would put downward pressure on global prices, by an estimated $5–$15 per barrel, boosting global GDP by an estimated 0.3 percentage point. While part of this impact may be already discounted in futures markets, a further decline could materialise when Iran’s exports rise, depending on how other OPEC producers react. The potential for Iran to increase its non-oil trade is also large, with estimates from a gravity model suggesting that Iran’s exports, at about 20 percent of GDP, are less than half of their potential. | The expected increase in oil supply from Iran would put downward pressure on global prices, by an estimated $5–$15 per barrel, boosting global GDP by an estimated 0.3 percentage point. While part of this impact may be already discounted in futures markets, a further decline could materialise when Iran’s exports rise, depending on how other OPEC producers react. The potential for Iran to increase its non-oil trade is also large, with estimates from a gravity model suggesting that Iran’s exports, at about 20 percent of GDP, are less than half of their potential. |
| 8.27am GMT08:27 | 8.27am GMT08:27 |
| Commenting on the UK market’s opening rise, analyst Tony Cross at Trustnet Direct said: | Commenting on the UK market’s opening rise, analyst Tony Cross at Trustnet Direct said: |
| After last night’s sharp sell off for London equities, the picture is looking a little more upbeat this morning but with traders heading away from their desks and little fundamental news on the agenda, it’s difficult to try and attribute too much to the early rebound. Only a few stocks are currently in negative territory with ITV bottom of the pile, retracing some of yesterday’s bid-inspired gains, whilst retailers are again feeling the pressure with concerns building over Christmas sales... | After last night’s sharp sell off for London equities, the picture is looking a little more upbeat this morning but with traders heading away from their desks and little fundamental news on the agenda, it’s difficult to try and attribute too much to the early rebound. Only a few stocks are currently in negative territory with ITV bottom of the pile, retracing some of yesterday’s bid-inspired gains, whilst retailers are again feeling the pressure with concerns building over Christmas sales... |
| Natural resources stocks are once again dominating the upper end of the index, but the potential upside is looking relatively limited and it’s difficult to believe this is down to anything more than some opportunistic bargain hunting. | Natural resources stocks are once again dominating the upper end of the index, but the potential upside is looking relatively limited and it’s difficult to believe this is down to anything more than some opportunistic bargain hunting. |
| 8.13am GMT08:13 | 8.13am GMT08:13 |
| In Japan, the government is planning nearly $800bn of spending next year to boost its struggling economy. | In Japan, the government is planning nearly $800bn of spending next year to boost its struggling economy. |
| The move is part of a budget due to be unveiled this week which should also see the country promising to cut back its huge debts. Reuters reports: | The move is part of a budget due to be unveiled this week which should also see the country promising to cut back its huge debts. Reuters reports: |
| Finance Minister Taro Aso on Tuesday vowed to boost growth and achieve fiscal reform with government budget spending worth 96.7trn yen ($797.53bn) for the next fiscal year that starts in April. This is up a touch from the 96.3bn yen spending set for the current year’s initial budget. | Finance Minister Taro Aso on Tuesday vowed to boost growth and achieve fiscal reform with government budget spending worth 96.7trn yen ($797.53bn) for the next fiscal year that starts in April. This is up a touch from the 96.3bn yen spending set for the current year’s initial budget. |
| Confirming figures reported by Reuters last week, Aso said tax revenue is estimated at a 25-year high of 57.6trn yen in fiscal 2016. | Confirming figures reported by Reuters last week, Aso said tax revenue is estimated at a 25-year high of 57.6trn yen in fiscal 2016. |
| That revenue assumption, based on an expected economic growth of nominal 3.1% and real 1.7%, will allow the government to slash new bond issuance by 2.4trn yen from this year to 34.4trn yen, he said. | That revenue assumption, based on an expected economic growth of nominal 3.1% and real 1.7%, will allow the government to slash new bond issuance by 2.4trn yen from this year to 34.4trn yen, he said. |
| The budget plans signal a growing commitment by Prime Minister Shinzo Abe to rein in the industrial world’s heaviest debt burden even as he continues to pump-prime the economy via a cocktail of expansionary policies. | The budget plans signal a growing commitment by Prime Minister Shinzo Abe to rein in the industrial world’s heaviest debt burden even as he continues to pump-prime the economy via a cocktail of expansionary policies. |
| “This budget is appropriate for marking the first step towards our new fiscal plan while we aim for economic revival and fiscal consolidation at the same time,” Aso told reporters after he presented the budget figures at a meeting between government officials and ruling party lawmakers. | “This budget is appropriate for marking the first step towards our new fiscal plan while we aim for economic revival and fiscal consolidation at the same time,” Aso told reporters after he presented the budget figures at a meeting between government officials and ruling party lawmakers. |
| 8.11am GMT08:11 | 8.11am GMT08:11 |
| In the wake of Spain’s election result at the weekend, which saw gains by anti-austerity party Podemos, Italian prime minister Matteo Renzi has warned in an interview with the Financial Times that the policies which many see as being imposed by Germany are having a detrimental effect on governments. The FT reports (£): | In the wake of Spain’s election result at the weekend, which saw gains by anti-austerity party Podemos, Italian prime minister Matteo Renzi has warned in an interview with the Financial Times that the policies which many see as being imposed by Germany are having a detrimental effect on governments. The FT reports (£): |
| Renzi, Italy’s centre-left prime minister, has warned that German-driven eurozone austerity policies are fanning the flames of populism, leading to political paralysis and electoral setbacks across the continent for incumbent governments. | Renzi, Italy’s centre-left prime minister, has warned that German-driven eurozone austerity policies are fanning the flames of populism, leading to political paralysis and electoral setbacks across the continent for incumbent governments. |
| In an interview with the Financial Times at his Rome office the day after voters in Spain slashed the majority in parliament enjoyed by centre-right prime minister Mariano Rajoy, leaving him struggling to form a new government, Mr Renzi said there was one main lesson to be learnt. | In an interview with the Financial Times at his Rome office the day after voters in Spain slashed the majority in parliament enjoyed by centre-right prime minister Mariano Rajoy, leaving him struggling to form a new government, Mr Renzi said there was one main lesson to be learnt. |
| “I don’t know what’s going to happen to my friend Mariano but I know that those who have been in the front line of being the faithful allies of the politics of rigour without growth have lost their jobs,” Mr Renzi said. | “I don’t know what’s going to happen to my friend Mariano but I know that those who have been in the front line of being the faithful allies of the politics of rigour without growth have lost their jobs,” Mr Renzi said. |
| “It happened in Warsaw, though the circumstances were very particular there, it happened in Athens, it happened in Lisbon. Let’s see what happens in Madrid,” he added. | “It happened in Warsaw, though the circumstances were very particular there, it happened in Athens, it happened in Lisbon. Let’s see what happens in Madrid,” he added. |
| Updated at 8.12am GMT | Updated at 8.12am GMT |
| 8.09am GMT08:09 | 8.09am GMT08:09 |
| European shares open higher | European shares open higher |
| As forecast, European markets have taken their cue from Wall Street’s overnight gains and a steady performance in Asia following the comments from China about further possible stimulus. | As forecast, European markets have taken their cue from Wall Street’s overnight gains and a steady performance in Asia following the comments from China about further possible stimulus. |
| The FTSE 100 is up 43 points or 0.7% while Germany’s Dax is up 1%, France’s Cac 0.7% and Italy’s FTSE MIB 0.9%. | The FTSE 100 is up 43 points or 0.7% while Germany’s Dax is up 1%, France’s Cac 0.7% and Italy’s FTSE MIB 0.9%. |
| In Spain the Ibex, which fell 3.6% following the election result, has opened 0.9% higher. | In Spain the Ibex, which fell 3.6% following the election result, has opened 0.9% higher. |
| Updated at 8.57am GMT | Updated at 8.57am GMT |
| 7.46am GMT07:46 | 7.46am GMT07:46 |
| European markets are expected to open higher after another volatile day on Monday - not helped by thin trading in the run up to the Christmas break. | European markets are expected to open higher after another volatile day on Monday - not helped by thin trading in the run up to the Christmas break. |
| Shares ended lower in Europe, losing their early gains as the falling oil price again hit sentiment, and the Spanish market dropped 3.6% following the country’s inconclusive election result at the weekend. | Shares ended lower in Europe, losing their early gains as the falling oil price again hit sentiment, and the Spanish market dropped 3.6% following the country’s inconclusive election result at the weekend. |
| But with a rise on Wall Street, analysts expect a positive start to the day: | But with a rise on Wall Street, analysts expect a positive start to the day: |
| Our European opening calls: $FTSE 6074 up 39 $DAX 10578 up 80 $CAC 4604 up 38 $IBEX 9436 up 71 $MIB 21273 up 173 | Our European opening calls: $FTSE 6074 up 39 $DAX 10578 up 80 $CAC 4604 up 38 $IBEX 9436 up 71 $MIB 21273 up 173 |
| 7.33am GMT07:33 | 7.33am GMT07:33 |
| Agenda: UK public finances in the spotlight | Agenda: UK public finances in the spotlight |
| Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business. |
| After hitting 11 year lows on Monday, oil prices have shown some signs of recovery. A glut of supply as Iran restarts exporting following the lifting of sanctions, along with fears of slowing demand, mean the cost of crude is on course for its biggest monthly fall since the collapse of Lehman Brothers in October 2008. | After hitting 11 year lows on Monday, oil prices have shown some signs of recovery. A glut of supply as Iran restarts exporting following the lifting of sanctions, along with fears of slowing demand, mean the cost of crude is on course for its biggest monthly fall since the collapse of Lehman Brothers in October 2008. |
| But with comments from China suggesting further stimulus measures might be taken to boost the world’s second largest economy, commodity prices have stabilised. So Brent crude after falling as low as $36.05 on Monday, has recovered 0.25% to $36.44. | But with comments from China suggesting further stimulus measures might be taken to boost the world’s second largest economy, commodity prices have stabilised. So Brent crude after falling as low as $36.05 on Monday, has recovered 0.25% to $36.44. |
| Meanwhile UK public finances will be the centre of attention this morning. | Meanwhile UK public finances will be the centre of attention this morning. |
| The figures are expected to show a rise in UK borrowing for November from £7.5bn to £11.1bn, partly due to the falling oil price which is undermining VAT receipts at the pumps, said Michael Hewson, chief market analyst at CMC Markets UK. | The figures are expected to show a rise in UK borrowing for November from £7.5bn to £11.1bn, partly due to the falling oil price which is undermining VAT receipts at the pumps, said Michael Hewson, chief market analyst at CMC Markets UK. |
| So chancellor George Osborne may well miss his £68.9bn borrowing target for the year. Hewson said: | So chancellor George Osborne may well miss his £68.9bn borrowing target for the year. Hewson said: |
| November generally tends to be a weak month in any case with December usually a little stronger as the tax year deadline gets closer. Even allowing for that the Chancellor looks set to fall short of his borrowing target for this tax year unless tax receipts start to improve substantially. | November generally tends to be a weak month in any case with December usually a little stronger as the tax year deadline gets closer. Even allowing for that the Chancellor looks set to fall short of his borrowing target for this tax year unless tax receipts start to improve substantially. |
| Howard Archer, chief UK and European economist at IHS Global Insight, said: | Howard Archer, chief UK and European economist at IHS Global Insight, said: |
| The public finances are expected to show that the public finances saw year-on-year improvement in November but to also highlight that the Chancellor will need sharply higher tax receipts in January if he is to meet the fiscal target for 2015/16 contained in November’s Autumn Statement. Specifically, we expect Public Sector Net Borrowing excluding banks (PSNBex) to have narrowed to £11.5bn in November from £13bn in November 2014. We also estimate that the total PSNB narrowed to £10.7bn in November 2015 from £12.2bn in November 2014. | The public finances are expected to show that the public finances saw year-on-year improvement in November but to also highlight that the Chancellor will need sharply higher tax receipts in January if he is to meet the fiscal target for 2015/16 contained in November’s Autumn Statement. Specifically, we expect Public Sector Net Borrowing excluding banks (PSNBex) to have narrowed to £11.5bn in November from £13bn in November 2014. We also estimate that the total PSNB narrowed to £10.7bn in November 2015 from £12.2bn in November 2014. |
| The Office of Budget Responsibility argues that there should...be a substantial improvement in the public finances over the final months of 2015/16 due to a number of factors. This particularly includes an expected jump in self-assessment tax receipts in January resulting from past policy measures. The OBR also expects spending cuts to have an increasing impact as pressure to meet budget targets mounts on departments subject to Treasury controls. | The Office of Budget Responsibility argues that there should...be a substantial improvement in the public finances over the final months of 2015/16 due to a number of factors. This particularly includes an expected jump in self-assessment tax receipts in January resulting from past policy measures. The OBR also expects spending cuts to have an increasing impact as pressure to meet budget targets mounts on departments subject to Treasury controls. |
| Otherwise, in the wake of last week’s interest rate rise by the US Federal Reserve, come the latest third quarter GDP numbers, expected to be revised lower from 2.1% to 1.9%. | Otherwise, in the wake of last week’s interest rate rise by the US Federal Reserve, come the latest third quarter GDP numbers, expected to be revised lower from 2.1% to 1.9%. |
| Updated at 9.30am GMT | Updated at 9.30am GMT |