UK achieves Osborne's deficit target - two years late
The UK has eliminated the deficit on its current budget two years later than George Osborne, the former chancellor, planned when he cut public spending in 2010.
In the 12 months ending in January the current budget had a £3bn surplus, the Financial Times reported, citing official figures. The figure, which excludes capital investment, moved into the black on an annual rolling basis in November, surprising some Treasury officials, the newspaper said.
The surplus, achieved two years later than Osborne envisaged when he imposed austerity on public services, is due to a sharp improvement in the public finances over the past six months.
Treasury officials told the FT there would be no loosening of fiscal policy at the Chancellor’s spring statement on 13 March in response to the surplus. Some Conservative MPs have called for increases to spending on health and other services to boost their party's popularity.
The government lost its majority at the 2016 general election – a shock some politicians blamed on public fatigue after seven years of austerity that has led to longer waiting times at hospitals, cuts to local services and pressure on doctors’ surgeries.
Paul Johnson, director of the Institute for Fiscal Studies, told the FT the turnaround was “ quite an achievement … but deficit reduction has come at the cost of an unprecedented squeeze in public spending”.