Country’s Budget Deficit Falls in May

Posted by siteadmin on Friday 30th of June 2017.

The perennial deliberation around the UK’s budget deficit (the net difference between the country’s overall income and expenditure) continued in June as the Office for National Statistics (ONS) reported that it stood at £6.7bn in May – an improvement of £300 million compared with the same month last year.

On a wider scale, the financial year-to-date now shows borrowing of £16.1bn, which is the lowest figure recorded since the same period in 2008, before the recession. Since then, the country’s various governments have been struggling with the public finances following the increase in borrowing seen as a result of the financial crisis.

A major contributor to this boost was the largest intake of Value Added Tax (VAT) receipts for any May on record; following a stall in VAT receipts in April this year.

Despite this encouraging data, the Chancellor of the Exchequer, Philip Hammond said whilst he appreciated that people are; “. . .weary after seven years of hard slog repairing the damage of the great recession…” he will continue with his policy of the strict fiscal rules that he set out last year where he committed the government to balance the budget deficit by the mid 2020s.

Hopefully, he will be able to achieve that ambition, but the UK’s economy may still stall somewhat during the prolonged Brexit negotiations taking place in Brussels with the European Union (EU) around the precise terms of the UK’s departure from the EU.