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UK borrowing higher than expected in April | UK borrowing higher than expected in April |
(35 minutes later) | |
Government borrowing was higher than analysts' expectations in April after forecasts for company tax payments fell short of hopes. | Government borrowing was higher than analysts' expectations in April after forecasts for company tax payments fell short of hopes. |
The Office for National Statistics said borrowing, excluding support for state-owned banks, was £7.2bn in April. | The Office for National Statistics said borrowing, excluding support for state-owned banks, was £7.2bn in April. |
That was down from £7.5bn last year but higher than analysts' forecasts of about £6,6bn. | That was down from £7.5bn last year but higher than analysts' forecasts of about £6,6bn. |
The ONS also revised up its estimate of the amount borrowed in the financial year to March to £76bn. | The ONS also revised up its estimate of the amount borrowed in the financial year to March to £76bn. |
That was £2bn more than its previous estimate, and £3.8bn above the prediction that had been made by the independent Office for Budget Responsibility (OBR), which produces forecasts for government. | That was £2bn more than its previous estimate, and £3.8bn above the prediction that had been made by the independent Office for Budget Responsibility (OBR), which produces forecasts for government. |
The main reason for the lower figure was weaker-than-expected income from workers' national insurance contributions. | The main reason for the lower figure was weaker-than-expected income from workers' national insurance contributions. |
The ONS says annual borrowing has been falling in general since the peak reached in the 2009-10 financial year. | The ONS says annual borrowing has been falling in general since the peak reached in the 2009-10 financial year. |
Last year's figure was £15.7bn lower than for the year before, and is half that borrowed in 2009-10. | Last year's figure was £15.7bn lower than for the year before, and is half that borrowed in 2009-10. |
'Muted start' | 'Muted start' |
The ONS said that total public sector net debt - excluding public sector banks - by the end of April stood at £1.596 trillion, the equivalent of 83.3% of gross domestic product. | The ONS said that total public sector net debt - excluding public sector banks - by the end of April stood at £1.596 trillion, the equivalent of 83.3% of gross domestic product. |
April's figure was affected by less-than-expected tax income from companies. Corporation tax revenue fell 5.1% from a year earlier to £5.8bn. | April's figure was affected by less-than-expected tax income from companies. Corporation tax revenue fell 5.1% from a year earlier to £5.8bn. |
But it was boosted by changes to property taxes, introduced in April for buyers of second homes and investment properties. | |
The figures for April were saw the biggest take of stamp duty on land and property on record of £1.3bn. | |
The Chancellor, George Osborne, has laid out targets for borrowing, which he has pledged to continue to bring down. | The Chancellor, George Osborne, has laid out targets for borrowing, which he has pledged to continue to bring down. |
Howard Archer, chief economist at IHS Global Insight, said: "The muted start to fiscal year 2016-17 will fuel doubts about George Osborne's ability to get the deficit down to £55.5bn in 2016-17. | Howard Archer, chief economist at IHS Global Insight, said: "The muted start to fiscal year 2016-17 will fuel doubts about George Osborne's ability to get the deficit down to £55.5bn in 2016-17. |
"It will also likely fuel even larger doubts about his ability to meet his long-term objective of a surplus of £10.4bn in 2019-20, especially as he now has to cover the £4.4bn gap that has resulted from the dropping of the planned cuts to disability benefits." | "It will also likely fuel even larger doubts about his ability to meet his long-term objective of a surplus of £10.4bn in 2019-20, especially as he now has to cover the £4.4bn gap that has resulted from the dropping of the planned cuts to disability benefits." |
Martin Beck, senior economic advisor to the EY ITEM Club, echoed that view: "This looks to be a tall order, particularly given that the recent weakness in activity appears to be dampening growth in tax receipts. The government will need to see a strong rebound in activity in the second half of the year if it is to have a realistic chance of keeping its deficit reduction plan on track." |