UK Posts First July Budget Surplus Since 2012

The surplus was the first for the month since 2012, in a sign that the wider economic recovery is finally feeding through into the public finances.

The Workplace for Nationwide Statistics (ONS) stated revenue tax receipts grew by 5.3pc, to £18.5bn, representing the most important July tax take since data started in 1997. In the first four months of the fiscal year, the deficit narrowed by 23 percent to 24 billion pounds, leaving Chancellor of the Exchequer George Osborne on track to meet his full-year forecast of 69.5 billion pounds.

It has borrowed £24bn this monetary yr, down £7.3bn – or virtually 25laptop – in contrast with a yr in the past.

Tombs added that if last month’s trend continued, the full-year deficit could undershoot the OBR forecast by around £2billion.

The surplus compares to a borrowing of £100m for the same month in 2014.

Speaking this morning, Mr Osborne said: ‘With more tax coming in this month than the Government spent, borrowing so far is nearly £71/2 billion lower than a year ago ‘.

Mr Osborne has pledged to eliminate Britain’s budget deficit within the next three years.

Underlying public sector net debt, at £1.51 trillion or 80.8 per cent of GDP, was slightly down on June.

David Kern, chief economist for the British Chambers of Commerce (BCC), welcomed the news but added that the UK still faced “major challenges” to stabilise its finances. The OBR expects Britain’s debt share to fall barely this yr to 80.3pc of GDP as the federal government brings ahead quite a lot of asset gross sales, together with its stake in RBS. But Kern was cautious about the longer-term and Britain’s struggle to shake off the legacy of the financial crisis.

Samuel Tombs, senior UK economist at Capital Economics, said that, before the recession, July had regularly seen a surplus, averaging £3bn, thanks to corporation tax receipts.

“The progress made this year in cutting the deficit provides the chancellor with greater flexibility, which will enable him to put more emphasis on ways to boost economic growth”.