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Lower tax receipts see UK borrow more than planned
Source: Agencies |
November 22, 2012, Thursday
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Print Edition
Print Edition
THE UK government continued to borrow more than planned in October as corporation tax receipts fell sharply in the wake of a nine-month recession, official data showed yesterday.
The Office for National Statistics said borrowing in October was 8.6 billion pounds (US$13.7 billion), up from 6 billion pounds a year earlier. Corporation tax revenue fell 10 percent, a sign that businesses continue to struggle - Britain only emerged from its latest recession in the third quarter of this year, with growth up 1 percent quarterly, largely on the back of a boost from the Olympic Games.
For the first six months of the fiscal year through October, the agency said the government's borrowing stood at 73.3 billion pounds, 5 billion pounds more than a year earlier. The increase comes despite a tough debt-reduction program which is the centerpiece of the government's economic strategy.
If that trend continues, full-year borrowing would be about 130 billion pounds, or 10 billion pounds above the government target.
Treasury chief George Osborne will give Parliament an update on his budget plans on December 5, and investors will be keen to see if he revises up his borrowing projections.
Minutes of the last meeting of the Bank of England's rate-setting committee showed that one member backed another monetary stimulus. David Miles argued there was enough slack in the economy that another 25-billion-pound injection into Britain's financial system would not stoke inflation.
So far the BOE has plowed 375 billion pounds into buying bonds from financial firms.
The Office for National Statistics said borrowing in October was 8.6 billion pounds (US$13.7 billion), up from 6 billion pounds a year earlier. Corporation tax revenue fell 10 percent, a sign that businesses continue to struggle - Britain only emerged from its latest recession in the third quarter of this year, with growth up 1 percent quarterly, largely on the back of a boost from the Olympic Games.
For the first six months of the fiscal year through October, the agency said the government's borrowing stood at 73.3 billion pounds, 5 billion pounds more than a year earlier. The increase comes despite a tough debt-reduction program which is the centerpiece of the government's economic strategy.
If that trend continues, full-year borrowing would be about 130 billion pounds, or 10 billion pounds above the government target.
Treasury chief George Osborne will give Parliament an update on his budget plans on December 5, and investors will be keen to see if he revises up his borrowing projections.
Minutes of the last meeting of the Bank of England's rate-setting committee showed that one member backed another monetary stimulus. David Miles argued there was enough slack in the economy that another 25-billion-pound injection into Britain's financial system would not stoke inflation.
So far the BOE has plowed 375 billion pounds into buying bonds from financial firms.
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