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7.75bn pounds surplus in UK's public finances raise expectation from budget
Connecticut State News.Net
Tuesday 21st February, 2012
LONDON - A combination of a rise in tax receipts and a drop in local government borrowings has helped the UK's public finances record a surplus of 7.75 billion pounds in January, the biggest monthly surplus for four years.
Data published by the Office for National Statistics Tuesday shows it is the biggest boost to the UK's public finances since 1998 and it has put the Treasury well on target to reduce its borrowing for the year.
January is traditionally a bumper month for tax returns as it is the deadline for individuals to pay their income tax. The trend last month compares well with January 2011 when there was a 5.2 billion pounds surplus.
The figures exclude financial interventions such as bank bailouts.
Borrowing for the fiscal year to date came in at 93.5 billion pounds, down from 109.1 billion pounds in 2010-11 fiscal.
Coming a month before Chancellor George Osborne unveils his annual Budget, the data suggests the government is on track to reduce its borrowing target to 127 billion pounds for 2011-12.
A Treasury spokesman said: "Our credible deficit plan is working and bringing Government borrowing down - so far this year it is 16 billion pounds lower than in the same period last year.
"It is the deficit plan, and its successful implementation, that is keeping interest rates at record lows for families and businesses and helping to support the recovery."
The surplus will help the government's underlying net debt slip below the 1trillion pound mark to 988.7 billion pound.
It has raised expectations of the likelihood of the government offering a stimulus to revive the economy. A senior Liberal Democrat has urged Osborne to use the Budget, on March 21, to raise the slab for personal taxes, saying it would make a "big difference" to the economy.
David Laws, the former chief secretary to the treasury, said Osborne should start "ending austerity" for millions of households by moving towards the coalition's goal of raising the income tax threshold to 10,000 pounds.
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