MNI DATA IMPACT: UK June Borrowing Up; Prior Revisions Lower

By Laurie Laird

     LONDON (MNI) - UK borrowing skyrocketed in June compared to a year ago, but

government receipts have held up better than previously estimated since the

start of the economic lockdown.

     The following are the main points from the June public sector finances

report released on Tuesday by the Office for National Statistics.

     - Borrowing hit GBP35.526 billion last month, in line with updated

projections by the Office for Budget Responsibility, taking debt to 99.6% of

gross domestic product, the highest level of since the fiscal year ending in

March 1961.

     - Despite the unprecedented deterioration in the government's finances

since March, prior months' borrowing is less worse than initially reported.

Borrowing hit GBP45.5 billion in May, down sharply from the GBP55.2 billion

reported last month. Borrowing in April was revised lower to GBP46.9 billion,

well below the initially-reported GBP62.1 billion.

     - Downward revisions to April and May borrowing pulled the debt-to-GDP

ratio below the 100.9% reported last month.

     - Better-than-expected government receipts accounted for much of the

downward revision to May borrowing. Value-added tax receipts were GBP2.3billion

higher than reported last month. PAYE recipes were revised up by GBP4.2 billion,

while National Insurance contributions were revised higher by GBP2.3 billion.

     - The June borrowing data could also be subject to significant revision, as

statisticians received updated OBR estimates just a day before compiling final

calculations. OBR data released in mid July will be reflected in next month's

release.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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