UK Analysis: July Borrowing Negative on Strong Tax Receipts>

-UK July PSNBex -Stg184 million vs Stg308 million July 2016

-UK Year-To-Date PSNBex +9.0% over 2016/17 to Stg22.8 billion

-UK July net debt ex BoE 80.3% of GDP vs 80.7% in July 2016

-UK 2016/17 PSNBex down to Stg45.2 bn vs Stg46.2bn reported in June

 By Laurie Laird and Jamie Satchithanantham

     London (MNI) - The UK public finances swung into the black in July, 

the first surplus for the  month since 2002, but an increase in 

government interest payments left year-to-date borrowing well above the 

same period last year. 

     Excluding public sector banks, government receipts exceeded outlays 

to the tune of Stg184 million, reversing borrowing of Stg308 million in 

July of 2016. Economists surveyed by MNI forecast borrowing of  Stg1.0 

billion in July. 

     That left net debt, excluding the Bank of England, at 80.3% of 

gross domestic product in July, down from 80.7% a year earlier. 

     Self-assessment tax receipts rose by Stg800 million in July, after 

falling in July of 2016, while value-added-tax receipts increased by 

Stg500 million, according to a National Statistics official. 

     But debt interest outlays rose by Stg700 million last month, after 

a Stg1.2 billion jump in June.  Inflation has lifted the payments to 

investors in index-linked gilts, with the increased coupon rate lagging 

price rises by three months, according to a National Statistics 

official. Over the first four months of the financial year, debt 

interest payments are up by Stg4.1 billion. 

     Corporate tax receipts declined by Stg100 million, the second 

straight month of decline. The official could provide no reason for the 

fall, but pointed out that, from April, accounting for corporate tax 

will be smoothed over the financial year. 

     Cooperate tax receipts are up Stg200 million year-to-date, to 

Stg19.2 billion. 

     Over the first third of the fiscal year, borrowing totaled Stg22.8 

billion, an 9.0% increase over the same period of last year. 

     That follows a dramatic improvement in the government's finances 

over the 2016/17 financial year. Borrowing was again revised downward to 

Stg45.2 billion, compared to the Stg46.2 billion reported last 

month,below the Stg51.7 billion target set by the Office for Budget 

Responsibility following the March budget. 

     The central government net cash requirement hit -Stg7.060 billion 

in July, compared to Stg2.877 billion in July of 2016. 

     The current budget deficit swung to a surplus of Stg3.430 in July, 

compared to a surplus of Stg2.491 billion a year earlier. 

     Including public sector banks, the public sector borrowing hit a 

repayment of Stg760 million in July, after a repayment of Stg268 million 

a year earlier. 

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

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