• U.k. public net borrowing stays below expectations

    Source: FxWire Pro - Commentary / 21 Sep 2018 14:55:29   America/New_York

    U.K. public net borrowing continues to be below expectation this fiscal year. In July, when self-assessment income tax payments stimulated tax receipts, the public finances recorded surplus of over GBP 3 billion, the highest for that month in 18 years. But the public sector balance returned to negative territory in August, with the figures released today recording a deficit of nearly GBP 7 billion.

    On a year-on-year basis, the figure has seen a deterioration of GBP 2.5 billion, mainly due a rise in central government spending. Nevertheless, when taken a look at the initial five months of this fiscal year together, net borrowing came in GBP 8 billion lower than compared to the equivalent period last year.

    With the latest official OBR projections implying just a small fall in borrowing this fiscal year, the figures so far seem to imply that the public finances are in a better shape than anticipated, with lower departmental spending and higher tax receipts, possibly reflecting strong employment growth and increased consumer spending in the summer months, noted Daiwa Capital Market Research in a report.

    At 18:00 GMT the FxWirePro's Hourly Strength Index of British Pound was highly bearish at -114.088, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -17.827. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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