{"id":3038,"date":"2010-09-21T10:10:04","date_gmt":"2010-09-21T10:10:04","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=3038"},"modified":"2025-03-27T15:49:05","modified_gmt":"2025-03-27T15:49:05","slug":"uk-public-borrowing-still-heading-for-big-undershoot","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=3038","title":{"rendered":"UK public borrowing still heading for big undershoot"},"content":{"rendered":"<p>Public sector net borrowing exceeded expectations in August but this was roughly balanced by downward revisions to earlier months in 2010-11, reflecting lower central government current expenditure and a higher yield from the bank payroll tax (now estimated at &pound;3.5 billion versus&nbsp;&pound;2.5 billion in the June Budget). Borrowing remains on course to undershoot the OBR&#8217;s full-year forecast of &pound;149 billion by a significant margin.<\/p>\n<p>Attempting to adjust for seasonal factors, borrowing excluding the temporary impact of financial interventions averaged &pound;11.65 billion in the first five months of the fiscal year, or &pound;140 billion annualised &ndash; see chart. The OBR forecast, therefore, implies renewed deterioration over the remainder of 2010-11.<\/p>\n<p>This is unlikely because the benefits of economic recovery should grow as the year progresses while much of the &pound;8.1 billion of spending cuts and tax rises announced since the election has yet to take effect. Even assuming no further decline&nbsp;in the underlying run rate, these measures should lower full-year borrowing to &pound;136 billion or less.<\/p>\n<p>The evolving undershoot increases <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2010\/6\/22\/uk-emergency-budget-was-the-vat-rise-necessary.html\">doubts<\/a> about the wisdom of the coming VAT&nbsp;hike (projected to raise &pound;12.1 billion 2011-12), especially with consumers facing a large rise in <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2010\/9\/10\/uk-inflation-4-cpi-rate-possible-if-food-surge-continues.html\">food<\/a> bills this winter &ndash; food commodity prices have continued to climb recently, with the CRB spot foodstuffs index in sterling terms now 11% above its August average.<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/uk-public210910.gif?__SQUARESPACE_CACHEVERSION=1285066712437\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Public sector net borrowing exceeded expectations in August but this was roughly balanced by downward revisions to earlier months in 2010-11, reflecting lower central government current expenditure and a higher yield from the bank payroll tax (now estimated at &pound;3.5 billion versus&nbsp;&pound;2.5 billion in the June Budget). Borrowing remains on course to undershoot the OBR&#8217;s [&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-3038","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\/3038","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=3038"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3038\/revisions"}],"predecessor-version":[{"id":5347,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3038\/revisions\/5347"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3038"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3038"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3038"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}