MNI 5 THINGS: UK Borrowing Surges on Higher Gov't Expenditure

By Laurie Laird, Jamie Satchithanantham

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

sector finances data published Wednesday by the Office for National Statistics.

     - Public sector borrowing overshot expectations by a wide margin in

October, lifted by a 6.6% surge in government borrowing, the biggest October

jump since 2015.

     - Year-to-date borrowing remains nearly 30% below year-ago levels, hitting

Stg26.7 billion in October. But YTD borrowing was down by as much as 40% as

recently as July. With increased government spending announced in the October

budget yet to hit borrowing figures, a further deterioration in the government's

borrowing position is likely in months to come.

     - Value-added tax payments increased by 3.3% in October, while income and

capital gains receipts rose by 2.6%, largely reflecting robust employment growth

and a long-awaited upturn in real wage growth.

     - But corporate tax growth remains sluggish, rising by 4.2% in the fiscal

year, the slowest expansion since 2013, coinciding with a slump in business

investment which has declined for three consecutive quarters.

     - Year-to-date borrowing has already overshot the revised OBR full-year

target by Stg2.2 billion. However, the payment of self-assessment tax receipts

in January could bring borrowing back below target. Repayments hit Stg9.618

billion in Jan 2018 and Stg11.651 billion a year earlier.

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

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