LONDON, Nov 18: Britain’s public finances improved significantly in October, official data showed on Friday, giving a boost to finance minister Gordon Brown ahead of his pre-budget report on December 5.
Britain’s budget deficit fell as the public sector net cash requirement (PSNCR) recorded a surplus of 4.965 billion pounds (7.278 billion euros, $8.501 billion), National Statistics said.
The PSNCR figure, which measures the public’s need to raise cash, compared with a record deficit of 11.993 billion pounds in September and marked the highest October surplus since 2001.
It also exceeded analysts’ consensus forecasts of a 0.3-billion-pound deficit, and compared with a surplus of 1.484 billion pounds in October 2004.
The improvement was due to a 23.4-per cent year-on-year jump in corporation tax receipts, National Statistics said.
The country’s public finances are often in surplus during October because a number of the larger British companies traditionally pay their quarterly corporation tax.
Public sector net borrowing (PSNB), the government’s preferred measure of the public sector finances, stood at a surplus of 2.18 billion pounds in October, the highest surplus for that month since 2002.
That was better than consensus forecasts of a 0.1-billion-pound deficit and compared with last year’s equivalent surplus of 1.70 billion pounds.
Net borrowing over the first seven months of 2005 stands at 20.9 billion pounds, down from 25.6 billion at the same stage last year.
Chancellor of the Exchequer Brown was to deliver his latest economic projections in his pre-budget report on Monday, December 5, it was announced on Thursday.
In his annual budget earlier this year, Brown predicted that PSNB over 2005/2006 would improve to 31.9 billion pounds from 36.8 billion pounds in 2004/5.
The last set of public finances data before the December 5 pre-budget report provide the chancellor with some comfort, said Geoff Dicks, economist at the Royal Bank of Scotland.—AFP
