Friday, July 19, 2013
The deficit carries on falling
Posted by David Smith at 01:00 PM
Category: Thoughts and responses

A month ago everybody, including the Labour party, got terribly excited about the fact that public sector net borrowing in 2012-13 was fractionally higher than in 2011-12. This was despite the fact that the latest year's numbers almost always get revised lower.

So it has proved again, and sooner than you might have expected. Borrowing for 2012-13 is now put at 116.5 billion, down from 118.5 billion in 2011-12. The deficit isn't tumbling, but it is falling. Expect that 2012-13 figure to be revised down again.

The picture for June is slightly more complicated. Stripping out distortions, June's borrowing looks to have been 0.5 billion higher than in June 2012. For April-June, public sector net borrowing excluding the distortions was 35.9 billion, unchanged on a year earlier. This was despite a sharp downward revision of receipts from the Swiss tax deal.

There are signs in the data of a stronger rise in tax receipts, particularly income tax and National Insurance. This, if maintained, could bode well for borrowing later in the year. More here.