MNI 5 Things: UK Borrowing Records Best YTD Result in 16 Yrs

By Jamie Satchi and Jai Lakhani

     LONDON (MNI) - The following are the key points from the UK public sector

finances data published Tuesday by the Office for National Statistics.

     - A bumper July surplus, the best for 18 years, drove year-to-date

borrowing to stg12.8bn -- the lowest Apr-Jul standing since 2002. The flattering

figures, alongside a further downgrade to 2017/18 borrowing, will place greater

pressure on  Chancellor of the Exchequer Philip Hammond to loosen the purse

strings and provide support to key public sector services.

     - The improvement in the overall borrowing picture appears to be led by

higher activity as opposed to lower spending. Year-to-date receipts were up 5%

to stg237.0bn (stg176.2bn in taxes) while government spending over the same

period was down just 1% to stg246.9bn.

     - Key to July's surplus was a stg1.0bn y/y rise in self assessment receipts

to stg9.0bn -- the highest on record for a month of July. Self-assessment

receipts are typically collected in January and, to a lesser extent, July and

have in the past run into the following month, so a positive contribution in the

August figures may also be on the cards too.

     - Also supporting the month's borrowing figures was a stg0.4bn increase in

PAYE receipts and a stg0.8bn increase in VAT receipts, supported by a new-low

jobless rate of 4.1% and robust core earnings growth. With public sector pay

increases set to bleed into the figures in coming months, further support via

higher consumption and income tax channels may materialise.

     - Borrowing over the 2017/18 fiscal year was once again revised down. The

latest figures placed borrowing at stg39.412bn and now sits some 14% below the

2016/17 total outturn

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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