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| Business live blog: UK government borrowing falls | Business live blog: UK government borrowing falls |
| (35 minutes later) | |
| 10.14am BST10:14 | |
| Unsurprisingly, the Treasury has welcomed the latest improvement in the public finances. | |
| A spokeswoman sends through this comment: | |
| “Today’s figures show that our deficit reduction plan is working, with cumulative borrowing over £6bn lower than at this point last year. We have more than halved the deficit, but with debt over 80% of GDP the job is not done. | |
| “That is why we will continue to work through our long term plan to achieve a budget surplus in normal times and secure a better economic future for working people.” | |
| Read our response to today’s @ONS monthly Public Sector Finances statistics for June 2015: pic.twitter.com/xGweBXVTK3 | |
| What the spokeswomen means by running a “budget surplus in normal times” is what has been dubbed Osborne’s “Mr Micawber Principle”. | |
| This is Osborne’s plan to run permanent budget surpluses in a bid to cut the national debt, which as today’s figures showed stands at £1.5tn in June, or 81.5% of GDP. | |
| His new fiscal framework, which the chancellor calls a “new settlement for the British economy”, allows the government to borrow only in exceptional circumstances. Osborne’s plan conjured images of Mr Micawber, a character in Charles Dickens’s David Copperfield. Governments were expected to at least balance the books in the 19th century and in the first three decades of the 20th century, when the public finances were run on the Mr Micawber principle that income exceeding spending equalled happiness and spending exceeding income equalled misery. | |
| 10.00am BST10:00 | |
| Picking out some of the highlights from those UK figures on the state of the public coffers in June: | |
| Reuters has more details here. | |
| 9.39am BST09:39 | 9.39am BST09:39 |
| The Office for National Statistics says that £0.8bn, or 8.3%, reduction in borrowing on a year ago came as income tax receipts rose to the highest level since records began in 1997. Corporation tax was also the highest amount on record. | The Office for National Statistics says that £0.8bn, or 8.3%, reduction in borrowing on a year ago came as income tax receipts rose to the highest level since records began in 1997. Corporation tax was also the highest amount on record. |
| £9.4bn PSNB Ex in June 2015, down £0.8bn compared with June 2014 http://t.co/uJXKdDuAST | £9.4bn PSNB Ex in June 2015, down £0.8bn compared with June 2014 http://t.co/uJXKdDuAST |
| The ONS cautions against reading too much into volatile monthly public finances data. It points to figures for the financial year-to-date (April 2015 to June 2015), showing public sector net borrowing was £25.1bn, a drop of £6.1bn, or 20% compared with the same period in 2014. | The ONS cautions against reading too much into volatile monthly public finances data. It points to figures for the financial year-to-date (April 2015 to June 2015), showing public sector net borrowing was £25.1bn, a drop of £6.1bn, or 20% compared with the same period in 2014. |
| Updated at 9.50am BST | Updated at 9.50am BST |
| 9.34am BST09:34 | 9.34am BST09:34 |
| UK public finances improve but by less than expected | UK public finances improve but by less than expected |
| Official figures just out show UK public sector borrowing fell again in June but by less than expected. | Official figures just out show UK public sector borrowing fell again in June but by less than expected. |
| Public sector borrowing fell to £9.4bn in June from £10.2bn a year ago. The consensus forecast in the market was for borrowing to fall further to £8.5bn, based on a Reuters poll of economists. | Public sector borrowing fell to £9.4bn in June from £10.2bn a year ago. The consensus forecast in the market was for borrowing to fall further to £8.5bn, based on a Reuters poll of economists. |
| 9.26am BST09:26 | 9.26am BST09:26 |
| European shares have edged lower in quiet trading this morning as the momentum from Monday’s relief rally peters out. | European shares have edged lower in quiet trading this morning as the momentum from Monday’s relief rally peters out. |
| The FTSE 100 in the UK, Germany’s Dax is flat and France’s CAC40 are all down between 0.1 and 0.2%. | The FTSE 100 in the UK, Germany’s Dax is flat and France’s CAC40 are all down between 0.1 and 0.2%. |
| As Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, notes it is debatable whether European stocks have further to climb. She comments: | As Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, notes it is debatable whether European stocks have further to climb. She comments: |
| “Now that the Greek problem has been kicked into the long grass, the key question for investors is whether the recent gains in European equity markets are simply a relief rally - or whether fears over Greece obscured a wider improvement in European economies and there is still significant value to be found? | “Now that the Greek problem has been kicked into the long grass, the key question for investors is whether the recent gains in European equity markets are simply a relief rally - or whether fears over Greece obscured a wider improvement in European economies and there is still significant value to be found? |
| On top of the effects of the ECB’s quantitative easing (QE), the Greek crisis has left the euro considerably weaker than it otherwise would have been. Greek fears also depressed company valuations. Nevertheless, European exporters should benefit significantly from the weak euro, while the financial sector should benefit from the effects of QE. As a consumer of energy and raw materials, Europe should also benefit significantly from the recent drop in commodity prices. | On top of the effects of the ECB’s quantitative easing (QE), the Greek crisis has left the euro considerably weaker than it otherwise would have been. Greek fears also depressed company valuations. Nevertheless, European exporters should benefit significantly from the weak euro, while the financial sector should benefit from the effects of QE. As a consumer of energy and raw materials, Europe should also benefit significantly from the recent drop in commodity prices. |
| As we progress through second quarter earnings, investors from the dollar bloc may begin to see European assets as increasingly attractive. Corporations too may see European companies as potential targets for M&A. So while Greek problems may be far from over, there is scope for European markets to capitalise on the back of lower currency and commodity prices and an increasing interest from a wider global market seeking value.” | As we progress through second quarter earnings, investors from the dollar bloc may begin to see European assets as increasingly attractive. Corporations too may see European companies as potential targets for M&A. So while Greek problems may be far from over, there is scope for European markets to capitalise on the back of lower currency and commodity prices and an increasing interest from a wider global market seeking value.” |
| Updated at 9.30am BST | Updated at 9.30am BST |
| 9.12am BST09:12 | 9.12am BST09:12 |
| The big corporate news of the day is that Toshiba’s chief executive and president, Hisao Tanaka, and his predecessor, Norio Sasaki, have quit over a $1.2bn accounting scandal. | The big corporate news of the day is that Toshiba’s chief executive and president, Hisao Tanaka, and his predecessor, Norio Sasaki, have quit over a $1.2bn accounting scandal. |
| An independent report said on Monday that Toshiba’s management knew about accounting regularities dating back to 2008. The company’s corporate culture put pressure on managers to manipulate figures to hit targets, the investigators said. | An independent report said on Monday that Toshiba’s management knew about accounting regularities dating back to 2008. The company’s corporate culture put pressure on managers to manipulate figures to hit targets, the investigators said. |
| Japan’s finance minister stepped up the pressure today by saying the affair threatened to undermine faith in Japan’s companies when the country was trying to demonstrate improved corporate governance. | Japan’s finance minister stepped up the pressure today by saying the affair threatened to undermine faith in Japan’s companies when the country was trying to demonstrate improved corporate governance. |
| The revelations at Toshiba follows a $1.7bn fraud at Olympus that was uncovered in late 2011. | The revelations at Toshiba follows a $1.7bn fraud at Olympus that was uncovered in late 2011. |
| My colleague Sean Farrell’s story has more details: | My colleague Sean Farrell’s story has more details: |
| Related: Toshiba boss quits over £780m accounting scandal | Related: Toshiba boss quits over £780m accounting scandal |
| 9.02am BST09:02 | 9.02am BST09:02 |
| Introduction: Focus turns to UK public finances | Introduction: Focus turns to UK public finances |
| Good morning and welcome to our rolling coverage of business and economics news from the UK, the eurozone and beyond. | Good morning and welcome to our rolling coverage of business and economics news from the UK, the eurozone and beyond. |
| Things appear to have quietened down after a frantic month in Greece and on Monday banks re-opened after a three-week closure. Using a bridging loan, Athens also started to repay its debts to international creditors and the International Monetary Fund declared Greece was no longer in arrears. | Things appear to have quietened down after a frantic month in Greece and on Monday banks re-opened after a three-week closure. Using a bridging loan, Athens also started to repay its debts to international creditors and the International Monetary Fund declared Greece was no longer in arrears. |
| But more challenges lie ahead, of course, and Greece’s ruling Syriza party has admitted it faces considerable political obstacles in pushing through reforms. The government, led by the prime minister, Alexis Tsipras, has appealed for unity as it faces another make-or-break vote in Athens on Wednesday. | But more challenges lie ahead, of course, and Greece’s ruling Syriza party has admitted it faces considerable political obstacles in pushing through reforms. The government, led by the prime minister, Alexis Tsipras, has appealed for unity as it faces another make-or-break vote in Athens on Wednesday. |
| By Wednesday, the Greek parliament must, as requested by creditors, pass a law to overhaul its civil justice system, with the aim of speeding up processes and reducing costs. The government must also transpose the EU’s bank recovery and resolution directive into law. | By Wednesday, the Greek parliament must, as requested by creditors, pass a law to overhaul its civil justice system, with the aim of speeding up processes and reducing costs. The government must also transpose the EU’s bank recovery and resolution directive into law. |
| Elsewhere, Asian shares edged up overnight after a higher close on Wall Street and gold prices pared some of their losses after a sharp sell-off on Monday that saw them hit a five-year low. | Elsewhere, Asian shares edged up overnight after a higher close on Wall Street and gold prices pared some of their losses after a sharp sell-off on Monday that saw them hit a five-year low. |
| Coming up today, the UK is in focus with the latest official figures on the public finances due at 9.30am (8.30GMT). Economists expect the June figures to show a further improvement, with borrowing down again, after May’s data showed a jump in income tax receipts. That brought government borrowing down to £10.1bn, the lowest since 2007. | Coming up today, the UK is in focus with the latest official figures on the public finances due at 9.30am (8.30GMT). Economists expect the June figures to show a further improvement, with borrowing down again, after May’s data showed a jump in income tax receipts. That brought government borrowing down to £10.1bn, the lowest since 2007. |
| On today’s data, Samuel Tombs at consultancy Capital Economics says: | On today’s data, Samuel Tombs at consultancy Capital Economics says: |
| “June’s public finances figures look set to show much lower borrowing than a year ago. Indeed, government departments may have already begun to find the £3bn extra savings that the chancellor asked them to deliver this year. We have pencilled in borrowing of just £8bn in June, versus £10.4bn in June last year.” | “June’s public finances figures look set to show much lower borrowing than a year ago. Indeed, government departments may have already begun to find the £3bn extra savings that the chancellor asked them to deliver this year. We have pencilled in borrowing of just £8bn in June, versus £10.4bn in June last year.” |
| There will be plenty more on chancellor George Osborne’s austerity drive and his recent summer budget when he is quizzed at 2.15pm by MPs on the influential Treasury committee. It will be streamed on www.parliamentlive.tv. | There will be plenty more on chancellor George Osborne’s austerity drive and his recent summer budget when he is quizzed at 2.15pm by MPs on the influential Treasury committee. It will be streamed on www.parliamentlive.tv. |
| Updated at 9.04am BST | Updated at 9.04am BST |