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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:

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