MNI DATA ANALYSIS: Aug Borrowing Surges; YTD Borrowing Down 30%>

-UK Aug borrowing Stg6.753bn vs Stg4.345bn Aug 2017

-UK April-Aug borrowing -30.5% over 2017 to Stg17.8 billion

     By Laurie Laird and Jamie Satchithanantham 

     London (MNI) - UK public borrowing surged unexpectedly in August as 

corporate tax receipts fell, but year-to-date borrowing remains at its 

lowest level since 2002, increasing the pressure on the Treasury to 

expand spending. 

     August borrowing, excluding the Bank of England, jumped to Stg6.753 

billion, well above the MNI median forecast of Stg3.5 billion, the 

highest for the month of August since 2016, compared to Stg4.345 billion 

on year earlier. 

     Net debt rose to 75.2% of gross domestic product in August, but 

down from 78.9% in the same month of 2017. 

     Corporate tax receipts declined by Stg300 million in August to 

Stg5.0 billion, leaving year-to-date receipts flat at Stg25 billion. 

That's the slowest year-to-date growth in corporate tax takings since 

2013, according to a National Statistics official. 

     The public sector finances were also impaired by a Stg700 million 

jump in net social benefits to Stg18.3 billion, courtesy of the annual 

upgrade in the triple lock pension adjustment. 

     However, the July surplus was revised upward by approximately Stg1 

billion to Stg3.072 billion, a result of more complete local authority 

spending forecasts, according to the official. 

     Over the first five months of the fiscal year, borrowing fell by 

30.5% over the same period of 2017 to Stg17.8 billion, the lowest since 

2002. That leaves the government on track to meet the Office for Budget 

Responsibility's forecast of a 6.0% drop in full-year borrowing to 

Stg37.1 billion. 

     Notwithstanding the surprise surge in August, the fall in borrowing 

over the financial year could stir calls for Chancellor of the Exchequer 

Philip Hammond to increase government spending when he presents the 

budget in November. The government has already pledged to allocate 

budget-busting sums to the National Health Service and has lifted public 

sector pay awards above inflation for the first time since the financial 

crisis. 

     The central government net cash requirement rose to Stg4.998 

billion in August, from Stg1.005 billion a year earlier. 

     The current budget deficit rose to Stg3.739 billion last 

month, from Stg1.624 billion a year earlier.    

     Including the Bank of England, public sector borrowing rose to 

Stg5.889 billion from Stg3.481 billion last year. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]