This article is from the source 'independent' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.independent.co.uk/news/business/news/brexit-latest-public-finances-continue-to-miss-official-targets-in-august-a7320046.html

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Brexit latest: Public finances continue to miss official targets in August Brexit latest: Public finances continue to miss official targets in August
(35 minutes later)
The improvement in the public finances continued to undershoot expectations in August, further undermining the Government’s hopes of reducing the deficit on its original planned timetable.The improvement in the public finances continued to undershoot expectations in August, further undermining the Government’s hopes of reducing the deficit on its original planned timetable.
The Office for National Statistics reported public spending exceeded taxes by £10.5bn last month.The Office for National Statistics reported public spending exceeded taxes by £10.5bn last month.
That was better than the £11.5bn deficit recorded in August last year, but slightly worse than the £10bn City of London analysts had pencilled in and it still leaves the Government well adrift from the £55.5bn borrowing target for 2016-17 set in the March Budget. That was better than the £11.5bn deficit recorded in August last year, but slightly worse than the £10bn City of London analysts had pencilled in - and it still leaves the Government well adrift from the £55.5bn borrowing target for 2016-17 set in the March Budget.
So far this financial year the Government has already borrowed £33.8bn, leaving just £21.7bn leeway over the next 7 months at a time when the economy is widely expected to slow due to the impact of the Brexit vote.So far this financial year the Government has already borrowed £33.8bn, leaving just £21.7bn leeway over the next 7 months at a time when the economy is widely expected to slow due to the impact of the Brexit vote.
If the public finances continue on the same path as seen in the first five months of the fiscal year, the £55.5bn target is likely be missed by around £11bn, analysts said.If the public finances continue on the same path as seen in the first five months of the fiscal year, the £55.5bn target is likely be missed by around £11bn, analysts said.
This is the second set of official public borrowing figures released since the 23 June referendum vote, yet the ONS said it found no clear signs of any impact of the Brexit result on the figures.This is the second set of official public borrowing figures released since the 23 June referendum vote, yet the ONS said it found no clear signs of any impact of the Brexit result on the figures.
The new Chancellor Philip Hammond has said he will “re-set” fiscal policy in the 23 November Autumn Statement, with expectations rising that he will enact a modest infrastructure-based fiscal stimulus to help the economy weather the impact of the Brexit vote.The new Chancellor Philip Hammond has said he will “re-set” fiscal policy in the 23 November Autumn Statement, with expectations rising that he will enact a modest infrastructure-based fiscal stimulus to help the economy weather the impact of the Brexit vote.
This would involve more borrowing than previously planned. And the Government has already jettisoned the previous target of running an absolute budget surplus in 2019-20. This would involve more borrowing than previously planned.
And the Government has already jettisoned the previous target of running an absolute budget surplus in 2019-20.
"Despite current economic resilience, the public finances look poised to take a hit from probable softening economic activity over the coming months taking a toll on tax receipts" said Howard Archer of IHS Global Insight."Despite current economic resilience, the public finances look poised to take a hit from probable softening economic activity over the coming months taking a toll on tax receipts" said Howard Archer of IHS Global Insight.
"The bad borrowing figures likely won’t stop Chancellor Hammond scaling back the existing fiscal consolidation plans in the Autumn Statement given that the gilt market remains relaxed and the budget surplus goal has been abandoned" said Samuel Tombs of Pantheon Macroeconomics. Suren Thiru of the British Chambers of Commerce urged the Chancellor to use the Autumn Statement to deliver a "better balance" between cutting the deficit and supporting growth than his predecessor George Osborne.
"But with the March Budget plans envisaging a severe fiscal squeeze, the Chancellor probably only has scope to change fiscal policy to a neutral, rather than a stimulatory, setting". "This must include bolstering the UK’s tax base through measures to increase business investment, and using historically low borrowing costs for much needed investment in infrastructure" he said.
More follows However, Samuel Tombs of Pantheon Macroeconomics said the Chancellor's freedom of movement was still restricted.
"With the March Budget plans envisaging a severe fiscal squeeze, the Chancellor probably only has scope to change fiscal policy to a neutral, rather than a stimulatory, setting" he said.
The ONS report showed that income tax receipts rose 12 per cent in August on a year earlier to £13.6bn.
However, VAT receipts were up only 0.7 per cent to £11bn.
Total receipts in the month were £49.8, up 7.1 per cent on a year earlier, while public spending was £55.1bn, up 4.3 per cent.