UK Budget Deficit Widens More Than Forecast
21 July 2017 - 6:17PM
RTTF2
The UK budget deficit widened more-than-expected in June as debt
interest increased notably after inflation lifted the cost of
index-linked bonds.
Public sector net borrowing, excluding interventions, increased
by GBP 2.0 billion from a year ago to GBP 6.9 billion in June, data
from the Office for National Statistics showed Friday. The expected
figure was GBP 4.9 billion.
Public sector finances have started to deteriorate a little,
limiting the scope for an easing in austerity and mean that fiscal
policy will still provide a significant drag on GDP growth over the
next few years, Scott Bowman, an economist at Capital Economics,
said.
Income tax and capital gains tax grew 7.1 percent to GBP 12.7
billion, while interest payments surged 32.9 percent due to higher
inflation.
In the current financial year-to-date, PSNB climbed by GBP 1.9
billion to GBP 22.8 billion.
Of this GBP 22.8 billion of PSNB, GBP 17.1 billion related to
the cost of the "day-to-day" activities of the public sector, while
GBP 5.7 billion related to capital spending such as
infrastructure.
Central government net cash requirement decreased by GBP 15.5
billion to GBP 11.5 billion during the three months ended June.
Public sector net debt totaled GBP 1,753.5 billion at the end of
June, equivalent to 87.4 percent of gross domestic product, data
showed.
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