We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Government borrowing less than forecast
stueyhants
Posts: 589 Forumite
http://news.bbc.co.uk/1/hi/business/8574018.stm
UK government borrowing could be less than forecast this financial year after better-than-expected figures for February and revised January data. The UK government borrowed £12.4bn in February, less than economists had expected, official figures have shown.
The figure for January was also revised sharply downwards, to £43m from £4.3bn.
Revisions for this financial year have now reduced borrowing by £2.9bn, meaning full-year borrowing could beat the government's £178bn forecast.
Until recently, most analysts thought the government's borrowing forecast was too optimistic.
Despite the revisions and February's better-than-expected figure, government borrowing is still running at record highs for the year, partly due to reduced tax receipts because of slow economic growth.
'Timely boost'
The borrowing figure for February was not as bad as some had feared, partly because of the rise in VAT at the beginning of this year and new taxes on bankers' bonuses.
"February's public finances figures have provided [Chancellor] Alistair Darling with a very timely boost ahead of next Wednesday's Budget," said Jonathan Loynes at Capital Economics.
"The figures leave a total deficit for the first 11 months of the year of £132bn, suggesting that Mr Darling may now hit or even undershoot his full-year forecast."
Howard Archer at IHS Global Insight agreed: "Mr Darling could significantly undershoot the £178bn public sector borrowing requirement that he forecast for 2009/2010 in last December's pre-Budget report."
Deficit cuts
Although the UK's overall level of debt is similar to other major economies, it has increased its borrowing during the downturn at a much faster rate than its competitors.
Chancellor Alistair Darling has pledged to halve the budget deficit in percentage terms over the next four years, but argues that making cuts now could harm the UK's recovery from recession.
On Wednesday, the European Union published a report saying that the government's plans to cut the deficit are not ambitious enough.
EU rules say government deficits must be below 3% of GDP, but the UK's deficit is expected to hit 12.6% of GDP this year.
The Conservatives also argue that cuts need to be made more quickly.
Burgeoning debt levels have also led to concerns in recent months that the UK could lose its AAA credit rating - reserved for the very safest borrowers.
However, earlier this week, Moody's agency said the UK's top rating was secure.
If the 11 month total is £132bn then surely it's forgone conclusion the total will come in under the orginal budget of £178bn?
UK government borrowing could be less than forecast this financial year after better-than-expected figures for February and revised January data. The UK government borrowed £12.4bn in February, less than economists had expected, official figures have shown.
The figure for January was also revised sharply downwards, to £43m from £4.3bn.
Revisions for this financial year have now reduced borrowing by £2.9bn, meaning full-year borrowing could beat the government's £178bn forecast.
Until recently, most analysts thought the government's borrowing forecast was too optimistic.
Despite the revisions and February's better-than-expected figure, government borrowing is still running at record highs for the year, partly due to reduced tax receipts because of slow economic growth.
'Timely boost'
The borrowing figure for February was not as bad as some had feared, partly because of the rise in VAT at the beginning of this year and new taxes on bankers' bonuses.
"February's public finances figures have provided [Chancellor] Alistair Darling with a very timely boost ahead of next Wednesday's Budget," said Jonathan Loynes at Capital Economics.
"The figures leave a total deficit for the first 11 months of the year of £132bn, suggesting that Mr Darling may now hit or even undershoot his full-year forecast."
Howard Archer at IHS Global Insight agreed: "Mr Darling could significantly undershoot the £178bn public sector borrowing requirement that he forecast for 2009/2010 in last December's pre-Budget report."
Deficit cuts
Although the UK's overall level of debt is similar to other major economies, it has increased its borrowing during the downturn at a much faster rate than its competitors.
Chancellor Alistair Darling has pledged to halve the budget deficit in percentage terms over the next four years, but argues that making cuts now could harm the UK's recovery from recession.
On Wednesday, the European Union published a report saying that the government's plans to cut the deficit are not ambitious enough.
EU rules say government deficits must be below 3% of GDP, but the UK's deficit is expected to hit 12.6% of GDP this year.
The Conservatives also argue that cuts need to be made more quickly.
Burgeoning debt levels have also led to concerns in recent months that the UK could lose its AAA credit rating - reserved for the very safest borrowers.
However, earlier this week, Moody's agency said the UK's top rating was secure.
If the 11 month total is £132bn then surely it's forgone conclusion the total will come in under the orginal budget of £178bn?
0
Comments
-
If we have set the 'overdraft' to £178bn, and (for example) we 'only' spend £150bn, well there's a bit more money in the kitty to spend isnt there?
I'd like some of it to go on free tickets for everyone to go to Alton Towers please. Oh, and make Sky Sports free and Jezzer Kyle pay-per-view.0 -
Alistair Darling - good egg.
Shame he won't be Chancellor after 6th May.“I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse0 -
Alistair Darling - good egg.
Shame he won't be Chancellor after 6th May.
Only if Georgie isn't either
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
What should we spend the "savings" on?
And this....what's this!!
That's not just revised downwards, that's basically off the scale in terms of revisions! Slight difference between the two!The figure for January was also revised sharply downwards, to £43m from £4.3bn
Not sure I'm quite believeing the stats here! Borrowed 43m in Jan, and 12.4bn in feb?!?0 -
-
Graham_Devon wrote: »If there was aver a slap in the face for labour voters, that's surely got to be it!
More annoying than George Osborne? I think he's a strong candidate:
Looks like Hitler without a moustache.0 -
It's been widely reported that Ed Balls will be the Chancellor if Labour win.
AD will be much to powerful by then.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
stueyhants wrote: »"The figures leave a total deficit for the first 11 months of the year of £132bn, suggesting that Mr Darling may now hit or even undershoot his full-year forecast."
Howard Archer at IHS Global Insight agreed: "Mr Darling could significantly undershoot the £178bn public sector borrowing requirement that he forecast for 2009/2010 in last December's pre-Budget report."
Excellent news.
132 billion is massively better than the 200 billion figure so many on here throw around.
That's a third of the deficit figures discussed on here gone before a single cut or efficiency saving is made.;)
And of course whatever the final amount is, as long as it's less than forecast, it's another nail in the coffin for the crash, lower borrowing than forecast, markets will react positively, rates will remain lower, less job cuts needed, etc etc etc....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245.1K Work, Benefits & Business
- 600.8K Mortgages, Homes & Bills
- 177.5K Life & Family
- 258.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards