UK Analysis: May Borrowing Declines; 2016/17 Revised Lower: MNI

-UK May PSNB Stg6.713bn vs Stg7.056bn May 2016 -UK 2016/17 PSNBex Revised Down to Stg46.6bn vs Stg48.7bn in May -UK May Net Debt Ex BoE 79.8% of GDP vs 81.2% in May 2016

London (MNI) – UK public borrowing declined in May, courtesy of rise in Value-Added-Tax receipts, while borrowing over the fiscal year ending in April was revised lower.

Excluding public sector banks, borrowing decreased to Stg6.713 billion in the second month of the financial year, from Stg7.056 billion in May of 2016, slightly above the MNI median forecast of Stg6.3 billion. That’s the lowest result for the month of May since 2007.

VAT receipts increased by Stg500 million, or 4.3% to Stg11.209 billion, the highest May on record. That’s despite a slowdown in consumer spending over recent months, but the calculation of VAT included in the latest data is derived partially from estimated data, according to a National Statistics official.

Stamp duty on land and property rose to Stg1.122 billion, also the highest May on record, from Stg1.113 billion in April.

That left net debt, excluding the Bank of England, at 79.8% of gross domestic product in May, down from 81.2% a year earlier.

Over the 2016/17 fiscal year, borrowing plunged by 35.4% percent to Stg46.6 billion, below the Stg48.7 billion reported last month, undershooting the Stg51.7 billion goal set by the Office for Budget Responsibility following the March budget.

That left net debt, excluding the Bank of England, at 80.5% of gross domestic product over the fiscal year, down from 80.7% reported last month and well below the 81.3% recorded in 2015/16.

Over the first two months of the fiscal year, borrowing fell by 0.4% to Stg16.1 billion, but the OBR forecasts a 25% jump in borrowing over the course of the full financial year.

The central government net cash requirement rose to Stg9.455 billion in May, from 6.672 billion in May of 2016.

The current budget deficit fell to Stg4.643 in May, compared to Stg5.355 billion a year earlier.

Including public sector banks, borrowing fell to Stg5.993 billion in May from Stg6.334 billion a year earlier.

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

WEDNESDAY, JUNE 21, 2017 – 04:30

Source: MNI

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