UK books budget surplus in July

Before the recession, July had regularly seen a surplus, averaging £3 billion, thanks to corporation tax receipts.

Many corporations pay their first company tax instalment on 2015 income in July, whereas self-assessment liabilities are additionally due, often making July the second highest month for receipts through the yr. The ONS stated a discount in central and native authorities internet borrowing of £1.5bn final month additionally helped to push Britain into surplus.

It suggests performance on cutting the deficit is running ahead of the latest independent forecast by the Office for Budget Responsibility (OBR) that it should fall by 21.1% for the full 2015/16 period.

Finance minister George Osborne welcomed Friday’s official figures, which also showed July was the 12th successive month of falling year-to-date public sector net borrowing, excluding banks.

Government borrowing was in surplus by £1.3bn in July, the Office for National Statistics (ONS) said.

Net debt fell to 1.51 trillion pounds, or 80.8 percent of gross domestic product.

In the financial year so far, borrowing is down £7.3bn to £24bn compared with the same period last year. But with debt over 80 per cent of GDP, the job is not done’. 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. Britain last had a surplus in the 2000-2001 fiscal year.

However, with eight months of the fiscal year to go, Tombs cautioned that it was “too soon to conclude that the Chancellor is meeting his fiscal plans with room to spare and could therefore reduce the scale of the austerity measures set to hit the economy”.

David Kern, chief economist at the British Chambers of Commerce, said Osborne could beat his deficit target for this year.

State coffers were boosted by 18.5 billion pounds of income tax receipts – the biggest intake for July on record – and up nearly a billion pounds compared with a year ago.