MNI DATA ANALYSIS: Dec Borrowing Falls Sharply on EU Credit>

-UK Dec PSNBex Stg2.591 billion vs Stg5.056 billion Dec 2016

-UK Year-To-Date PSNBex -11.7% over 2016/17

-UK December net debt ex BoE 77.2% of GDP vs 80.8% in December 2016

     By Laurie Laird and Jamie Satchithanantham 

     London (MNI) - UK public borrowing plunged in December, courtesy of 

a large credit from the European Union, leaving year-to-date borrowing 

sharply below the same period of 2016/17.

     Excluding public sector banks, borrowing decreased to 

Stg2.591 billion last month, from Stg5.096 billion in December of 2016, 

well below the MNI median forecast of Stg5.0 billion. That's the lowest 

for the month of December since 2000.

     That left net debt, excluding the Bank of England, at 77.2% of 

gross domestic product in December, down from 80.8% a year earlier. 

     Government outlays fell dramatically, due to a Stg1.2 billion 

credit from the EU, following the adoption of agreed amendments that 

reduced the size of the bloc's 2017 budget, and adjusted member states 

contributions to growth forecasts. The change was anticipated by the 

Office of Budget Responsibility when deriving borrowing forecasts in 

November of last year. 

     Government revenues gained from a 4.9%, or Stg600 million increase 

in Value Added Tax receipts, to a record-high Stg12.3 billion. The jump 

comes despite a slow-down in retail sales, but a National Statistics 

official pointed out that just 40 percent of household spending falls 

within the retail category.   

     Over the year to date, borrowing fell by 11.7% over the same period 

of 2016/17, to Stg50.0 billion, the lowest nine-month total since 2007.  

     That leaves the Treasury chasing a seemingly-obtainable 

borrowing target, even after the Office for Budget Responsibility 

reduced its 2017/18 projection by Stg8.4 billion to Stg49.9 billion in 

the wake of the budget address on November 22. 

      The central government net cash requirement fell to Stg18.668 

billion in December, below the Stg19.176 billion in December of 2016. 

     The current budget hit a surplus of Stg1.368 billion in 

December compared to Stg1.497 billion a year earlier. 

     Including public sector banks, the public sector borrowing fell to 

Stg979 million in December, from Stg4.480 billion a year earlier. 

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

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