{"id":2883,"date":"2009-10-20T13:17:10","date_gmt":"2009-10-20T13:17:10","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2883"},"modified":"2025-03-27T15:48:55","modified_gmt":"2025-03-27T15:48:55","slug":"uk-deficit-overshoot-less-likely-retail-m4-stronger","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2883","title":{"rendered":"UK deficit overshoot less likely; retail M4 stronger"},"content":{"rendered":"<p>Recent public borrowing figures cast doubt on the consensus view that the deficit will exceed the Budget forecast of &pound;175 billion in 2009-10. According to the Treasury&#8217;s September <a title=\"http:\/\/www.hm-treasury.gov.uk\/d\/200909forcomp.pdf\" href=\"http:\/\/www.hm-treasury.gov.uk\/d\/200909forcomp.pdf\" target=\"_blank\">survey<\/a> of forecasters, the median projection is &pound;184 billion.<\/p>\n<p>The &pound;175 billion official target implies an average of &pound;14.6 billion a month. In the first half of the year, however, a measure of borrowing adjusted for seasonal variation averaged &pound;12.4 billion &ndash; see first chart.<\/p>\n<p>To reach the official projection, borrowing would need to rise to &pound;16.8 billion a month in the second half of the year but a three-month moving average has recently stabilised well below this level. The reversal of last December&#8217;s VAT cut from January should limit further deterioration later in 2009-10.<\/p>\n<p>Money supply figures also released today show a further pick-up in &#8220;retail M4&#8221;, comprising notes and coin in circulation, retail bank deposits and building society deposits &ndash; second chart. Inflation-adjusted retail M4 is a leading indicator of retail sales &ndash; third chart. The improvement suggests stronger spending into year-end but real money growth is likely to fall back in late 2009 and early 2010 as headline inflation rebounds &ndash; see previous <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2009\/10\/15\/uk-inflation-still-on-track-to-rebound-sharply.html\">post<\/a>.<br \/><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/uk-public-sector-201009.gif?__SQUARESPACE_CACHEVERSION=1256045455612\" alt=\"\" \/><\/span><\/span><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/uk-retail-m4-201009.gif?__SQUARESPACE_CACHEVERSION=1256045473674\" alt=\"\" \/><\/span><\/span><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/uk-retail-sales-201009.gif?__SQUARESPACE_CACHEVERSION=1256045488799\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recent public borrowing figures cast doubt on the consensus view that the deficit will exceed the Budget forecast of &pound;175 billion in 2009-10. According to the Treasury&#8217;s September survey of forecasters, the median projection is &pound;184 billion. The &pound;175 billion official target implies an average of &pound;14.6 billion a month. In the first half of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2883","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2883"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2883\/revisions"}],"predecessor-version":[{"id":5192,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2883\/revisions\/5192"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}