UK’s bud­get deficit swelled to record in Nov

The Pak Banker - - Front Page -

LONDON: Bri­tain's bud­get deficit swelled to a record in Novem­ber, un­der­scor­ing the chal­lenge fac­ing Prime Min­is­ter David Cameron as his govern­ment pre­pares to im­ple­ment the deep­est spend­ing cuts since World War II.

Net bor­row­ing was 22.8 bil­lion pounds ($35.4 bil­lion), com­pared with 16.7 bil­lion pounds a year ear­lier, the Of­fice for Na­tional Statis­tics said in London to­day. The me­dian of 12 fore­casts in a Bloomberg News sur­vey was 16.8 bil­lion pounds. Spend­ing rose the most since Fe­bru­ary. The short­fall ex­clud­ing govern­ment sup­port for banks was 23.3 bil­lion pounds.

Busi­ness Sec­re­tary Vince Cable said there was a "con­stant bat­tle go­ing on be­hind the scenes" be­tween his Lib­eral Democrats and the Con­ser­va­tives over how to re­duce the bud­get short­fall. As Bri­tons brace for spend­ing cuts and tax in­creases, Cable's com­ments to un­der­cover news­pa­per re­porters from the Daily Tele­graph news­pa­per il­lus­trate Cameron's strug­gles to hold the coali­tion govern­ment to­gether.

"The fig­ures re­in­force the need for fis­cal con­sol­i­da­tion," Philip Shaw, chief econ­o­mist at In­vestec Se­cu­ri­ties in London, said in a tele­phone in­ter­view be­fore the re­port. In 2011, "there should be a much more no­tice­able im­prove­ment in pub­lic fi­nances if the econ­omy man­ages to with­stand the cuts, which we think it will."

The pound pared its gain against the dol­lar af­ter the re­port and was at $1.5522 as of 9:32 a.m. in London, lit­tle changed from yes­ter­day. Bonds de­clined, with the yield on the bench­mark two-year gilt up 3 ba­sis points at 1.187 per­cent. Rev­enue rose 3.1 per­cent in Novem­ber from a year ear­lier, the least this year, held back by re­pay­ments of value- added tax to com­pa­nies, the statis­tics of­fice said. Govern­ment spend­ing jumped 10.8 per­cent, led by Euro­peanUnion pay­ments and ex­pen­di­ture on health, de­fense and lo­cal govern­ment ser­vices.

In the first eight months of the fis­cal year that be­gan in April, rev­enue in­creased 8.2 per­cent, while spend­ing rose 6.8 per­cent. The deficit in the pe­riod ex­clud­ing fi­nan­cial in­ter­ven­tions nar­rowed to 104.4 bil­lion pounds from 105.1 bil­lion pounds a year ear­lier. There was a pub­lic-sec­tor cash re­quire­ment of 16.8 bil­lion pounds in Novem­ber, com­pared with 14.8 bil­lion pounds a year ear­lier. Econ­o­mists pre­dicted 12.3 bil­lion pounds. The cen­tral-govern­ment cash deficit, the mea­sure the Trea­sury says most closely in­di­cates gilt sales, was 14.4 bil­lion pounds. Net debt was at 58 per­cent of gross do­mes­tic prod­uct, up from 50 per­cent a year ago. -PB News

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