UK government borrowing falls to 17-year low
UK government borrowing has fallen to its lowest level since 2002, official estimates published on Wednesday showed.
The Office for National Statistics said borrowing in the latest full financial year, to March 2019, was estimated to be £24.7bn. That was £17.2bn less that in the previous year, and the lowest yearly borrowing for 17 years.
It was, however, ahead of the £22.8bn forecast by the Office of Budget Responsibility.
Public sector net debt, excluding public sector banks was £1,801bn, up £22.1bn on March 2018. That was slightly below the OBR's forecast of £1,803bn.
In March, the public sector borrowed £1.7bn, after the government spent more than it received in taxes and other incomes. That was well above March 2018’s figure of £800m and above a consensus for £400m.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that March’s hike did not indicate a lagging economy, however.
“The jump in borrowing entirely reflects a £1.8bn increase in central government net investment, which is volatile and will boost the economy,” he noted.
“Central government current receipts rose by 5% year-on-year, trivially below the 5.1% average rate in the first 11 months of the 2018/19 fiscal year. Both PAYE income tax receipts and VAT receipts, which are the timeliest revenue streams, remained on a steady rising path, up 4.9% and 3.2% year-over-year respectively."
“Given the large fiscal headroom in the Spring Statement, the Chancellor still should be able to scrap the further austerity measures planned for 2020/21 in the Budget later this year, and meeting his target for cyclically-adjusted borrowing to be blow 2% of GDP.”
This was the ONS’s first estimate for borrowing for the full financial year to March 2019. Revisions are expected in the coming months ahead of the final data being published.