MNI: UK Data F'casts Aug Public Sector Fin, UK Mortg Approvals

By Jamie Satchithanantham

     LONDON (MNI) - UK public sector finances recorded a surplus of stg0.2bn in

July, the first July surplus in fifteen years, after a stg0.3bn shortfall last

July. 

     The surplus was courtesy of an increase in self-assessment income tax

receipts, but was  flattered by timing effects. The deadline for tax returns

fell on a Sunday last year causing a spill over of receipts into August. That

means some form of payback this August will have materialised. 

     Alongside this, higher debt interest repayments, which will continue to

rise on the back of rising inflation (CPI and RPI rose to 2.9% and 3.9%

respectively in August) will persist in boosting borrowing levels seen this

financial year.     

     Borrowing is expected to come in at stg7.3bn in August, above the stg6.8bn

reading recorded last August.  

------------------------------------

                                 Aug

                    Public Finances-

                             PSNB ex

                              stg bn

Date Out                      21-Sep

Median                           7.3

Forecast High                    7.9

Forecast Low                     7.0

Standard Deviation               0.3

Count                             10

Prior                           -0.2

Capital Economics                7.5

HSBC                             7.9

Investec                         7.8

Lloyds TSB                       7.1

Morgan Stanley                   7.0

Nomura                           7.5

Oxford Economics                 7.0

Pantheon                         7.2

RBC                              7.0

Societe Generale                 7.3

     Year-to-date borrowing is up 9% on the same period last year, a lot smaller

than the 29% increase projected for the 2017/18 financial year as a whole.

Though this trend is not expected to continue throughout the rest of the

financial year, revisions to OBR figures from last year could potentially reduce

the divergence to some extent.    

     Since the March Budget and the OBR's forecast for 2016/17 borrowing,

initially placed at stg52bn, the actual number has been revised down some 13% to

stg45.1bn. 

     Also due Thursday are the UK Finance (formerly BBA) UK mortgage approvals.

In recent months house price growth has lost pace while approvals have slipped

away from levels set last year as household grapple with squeezed incomes and

increased economic ambiguity. 

     Analysts do not think this dampened sentiment would have washed away in

August and pencil in approvals declining to 40.8k from 41.6k in July.   

     This would be consistent with the most recent RICS survey which saw its

measure of new buyer enquiries drop into negative territory for much of 2017. It

held firm at -4 in August.   

--------------------------------------

                                   Aug

                            UK Finance

                    Mortgage Approvals

                                 '000s

Date Out                        21-Sep

Median                            40.8

Forecast High                     42.4

Forecast Low                       9.0

Standard Deviation                18.8

Count                                3

Prior                             41.6

Capital Economics                  9.0

HSBC                              42.4

Pantheon                          40.8

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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