Big boost for Philip Hammond before he presents next month’s budget
In a welcome news for Chancellor Philip Hammond before he presents the annual budget next month, Britain has posted its smallest budget deficit for any September in the last 10 years.
The government had borrowed £5.9bn in September, down almost 11 percent compared with the same month last year, the Office for National Statistics (ONS) stated today, adding that the UK government has borrowed an additional £32.5bn this financial year, down £2.5bn compared with the same period of 2016, making it the smallest deficit in a decade.
Chancellor and finance minister Philip Hammond has reportedly been under pressure from his own Conservative Party as well as from the opposition to loosen his grip on public spending when he presents the next month’s budget. But this became doubtful after Britain’s budget forecasters stated this month that they were likely to cut their productivity growth forecasts, suggesting slower economic growth and tax revenues in the future.
Just days ago, the Bank of England had hinted at the possibility of raising interest rates in the coming months.
According to media reports, some economists fear the improving trajectory may not last as a slower economy may weigh down future tax receipts.For now, however, tax revenues remain healthy. The ONS reported strong receipts from value-added sales tax, income tax and the stamp duty property tax.
A Treasury spokesperson has stated: “Whilst we’ve made great progress getting the deficit down by over two thirds, Government borrowing is still far too high at over £150m a day. We will continue to take a balanced approach that deals with our debts and allows us to invest in our public services.”