MNI DATA ANALYSIS: Oct Borrowing Up on Soaring Gov't Spending>

-UK Oct borrowing Stg8.820bn vs Stg7.235 Sep 2017

     By Laurie Laird, Jamie Satchithanantham and Jai Lakhani 

     London (MNI) - UK public borrowing surged in October, courtesy of 

sharp increase in government spending, but year-to-date borrowing 

remains well below 2017 levels. 

     October borrowing, excluding the Bank of England, jumped to 

Stg8.820 billion, well above analysts' forecast of Stg6.1 billion, the 

highest for the month of October since 2015, compared to Stg7.235 

billion a year earlier. 

     Net debt still fell to 75.0% of gross domestic product last month 

from 79.0% in the same month of 2017. 

     A 6.6% leap in government expenditure -- the biggest for the month 

of October since 2007 -- accounted for much of the deterioration in the 

government's borrowing position. 

     Purchases of goods and services rose by Stg1.0 billion, while 

spending on net social benefits increased by Stg800 million, according 

to a National Statistics official.  Interest payments -- linked to 

rising yields on index-linked gilts -- added another Stg800 million to 

government outlays in the month. 

     That lifted government expenditure by 2.4% to Stg 410.9 billion 

over the first seven months of the financial year, although spending was 

up by an annual pace of more than 3% at the same point of the last 

financial year. 

     Borrowing also remains well below year-ago levels over the course 

of the fiscal year, recording an annual decline of 29.6% over 2017 to 

Stg26.7 billion. However, borrowing was running as much as 40% below 

year-ago levels as recently as July. Nevertheless, that's the lowest for 

this point in the fiscal year since 2005. 

     Year-to-date borrowing has exceeded the OBR's new target of Stg25.5 

billion, as announced after the budget statement on October 29, a 16.7% 

decline on 2017/18. But the payment of self-assessment tax receipts in 

the beginning of the calendar years tend to leave the Treasury with a 

sizable surplus in the month of January. 

     Corporate tax increased by 1.7% to Stg4.7 billion in October, 

leaving year-to-date takings at Stg36.0 billion, up 4.2% over 2017. 

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

2013. 

     The central government net cash requirement hit -Stg3.630 billion 

in October, compared to -Stg6.948 billion a year earlier. 

     The current budget deficit rose to Stg5.195 billion in October from 

last stg3.925bn in October 2017.         

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

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