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First look at public finance data: Budget fiscal headroom is c. GBP10bln

UK DATA
  • At first glance surplus on PSNBex is smaller than expected (i.e. worse) but there was a small downward revision to last month's borrowing number.
  • Income tax plus capital gains tax receipts were down GBP1.8bln from last year - which appears to account for the surprise to consensus. Recall that we really need to look at both Jan+Feb to get a better idea of the tax take, though, as some people pay late.
  • Will need to look more into the data to see if there are any further revisions going back to see if this has any implications for the amount of lee-way the Chancellor will have for further "giveaways" in the Budget.
  • At first glance it looks as though YTD borrowing is still around GBP10bln better than the OBR's November forecast. That is smaller than the GBP20bln of fiscal headroom suggested at the turn of the year when expectations for a further income tax cut were high. However, expectations have tempered since then.
  • All in all, and from a very first look, this looks like it probably won't move expectations too much. And the more important release going into the UK SONIA morning open may well be the XpertHR data overnight which showed that median pay deals have come down for the first time since August.
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