MNI DATA IMPACT: UK Feb Borrowing Ahead of Tsy Spending>

     LONDON (MNI) - UK borrowing fell to its lowest February level in 

three years, but the government's financial position will deteriorate 

markedly in the months to come, with another round of coronavirus 

stimulus expected later on Friday. 

     The following are the key points from public sector finance data 

published Friday by the Office for National Statistics.

     - February borrowing slipped to GBP331 million, the lowest since 

February of 2017, leaving year-to-date borrowing at GBP44.0 billion, 

below the OBR full-year target of GBP47.4 billion, but still up 10.4% 

over the previous fiscal year. 

     - The Jan surplus was revised higher by just under GBP2 billion to 

GBP11.708 billion, due to a downward adjustment of GBP1.2 billion in 

debt interest payments.  However, that revision will be applied 

throughout the 2019/20 fiscal year in months to come, suggesting a 

downward revision in the January surplus. 

     - Other government spending continues to skyrocket, with staff 

costs surging by 8.2% in February, partially reflecting a new National 

Health Service settlement.  Spending on goods and services jumped by 

7.3%. A GBP1.5 billion fall in payments to the European Union in 

February flattered the monthly outturn, but other government spending 

is still up by 4.8% over the same period a year earlier. 

     - Chancellor of the Exchequer Rishi Sunak announced a GBP350 

billion package of loans and grants earlier this week, and another 

raft of stimulus is expected later on Friday, wreaking havoc with 

borrowing forecasts. 

     -  However, OBR Chairman Robert Chote abandoned his fiscal caution 

in testimony before the Treasury Select Committee earlier this week, 

likening the economic uncertainty caused by the coronavirus to a 

"wartime situation" and urged the government not to be "squeamish" 

about higher debt. 

  - Corporate tax receipts continue to disappoint, falling by 5.4% 

in February, the biggest annual fall since 2012. Corporate taxes are 

down by 4.1% over the fiscal year, the biggest fall since 2011/12.

     - But Value-Added-Tax receipts rebounded in February, rising by 

4.8% to GBP12.6 billion, the highest level on record (not adjusted for 

inflation). Over the year to date, VAT receipts are up by 3.2%.

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

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