22
Feb
UK PUBLIC FINANCES IN BIGGEST SURPLUS FOR FOUR YEARS
The government received more money than it spent in January
leaving it with its highest monthly surplus in four years.
The Office for National Statistics (ONS) said the surplus followed
a fall in local government borrowing and a rise in tax
receipts.
It said the public sector made a net repayment - excluding
financial interventions - of £7.75bn, up from £5.2bn a
year ago.
January's finances are often in surplus because of a spike in tax
receipts.
The government has borrowed £93.5bn in the tax year to date,
down from £109.14bn in 2010/11,Chris Williamson, chief
economist at Markit, said the figures meant the government was on
track to meet or even beat its borrowing target of no more than
£127bn this year. "With two months to go, that target looks
easily attainable," he said. "The target would still be met even if
the deficit in February and March matched the recent record of
£29bn seen for these two months in 2010."
In the year 2010-11, the government borrowed £136bn.
Shaky ground
The UK's total public sector net debt, excluding financial sector
interventions, fell back to £988.7bn, or 63% of gross domestic
product, having breached £1tn in December.
The level of government borrowing is one of the data series looked
at by ratings agencies, which judge the likelihood of a borrower
defaulting, something that can affect the cost of borrowing.
Last week, the ratings agency Moody's warned that Britain could
lose its top, triple-A credit rating in the next 18 months.
Ross Walker, economist at RBS, said these borrowing figures could
weigh positively on Moody's continuing assessment: "It's a good set
of data. We are still borrowing huge sums, but against a backdrop
where we had Moody's negative outlook and there was growing talk
about the UK's rating... these numbers help."
Despite the improved borrowing figures, the UK economy remains on
shaky ground.
Official data on Friday is expected to confirm the economy shrank
by 0.2% in the final three months of 2011, and the Bank of England
last week said it expected the economy to "zigzag" in and out of
growth this year.
The Chancellor, George Osborne, will deliver his annual Budget next
month.
The chief economist at the British Chambers of Commerce, David
Kern, said the January borrowing figures gave him scope to help the
economy grow.
"This gives the chancellor some room for flexibility in his
upcoming Budget to implement measures to support growth and help
companies create jobs, invest and export," he said.
"This should include an effective credit easing programme and an
aggressive reduction in red tape."
Source: BBC News