Borrowing by public sector falls during July

CHANCELLOR PHILIP Hammond has been given cause to celebrate as official figures showed the Government logged its largest July surplus in 18 years.

Figures from the Office for National Statistics (ONS) show public sector net borrowing, excluding state-owned banks, was in surplus by £2bn in July, £1bn more than the surplus logged in July 2017.

Economists had been expecting a surplus of £1.1bn.

Government coffers were bolstered by receipts on self-assessed income tax, which are usually higher in January and to a lesser extent in July.

The figures also showed that the deficit, excluding banks, in the current financial year to date was £12.8bn, which is £8.5bn less than during the same period in 2017.

That covers the period between April to July this year.

Public sector net debt, excluding state-owned banks, increased by £17.5bn to £1,777.5bn in July, equivalent to 84.3 per cent of gross domestic product (GDP).

Howard Archer, chief economic adviser for the EY ITEM Club, said yesterday that if the pattern observed over the past four months continues, public sector net borrowing excluding banks would come in at £23.7bn for the full fiscal year.

That would be “substantially below the £37.1bn shortfall expected”, he noted.

At this rate, the Chancellor could scrap plans for further fiscal tightening over the next two years at the upcoming autumn Budget while keeping public finances on track, according to Pantheon Macroeconomics’ chief UK economist Samuel Tombs. THE NORTH could be at the heart of a “fourth industrial revolution”, Northern Powerhouse Minister Jake Berry told workers at a Sheffield engineering firm.

Mr Berry was on the latest stop of a three-day tour of northern businesses, which included trips to ABP Ports in Immingham, Arco in Hull and Produmax in Shipley yesterday.

During a question and answer session at aerospace and nuclear engineering firm CW Fletcher, he told staff that the Northern Powerhouse was about creating a northern economy that their “children and grandchildren” would want to work in, rather than heading South for work.

He said the North, historically at the forefront of previous “leaps forward” in terms of industry and the economy, could be at the heart of a “fourth industrial revolution”. “We can support this,” he told the group of around 60 staff on the shop floor, “because Britain needs the North to succeed.”

He was speaking the day after a director of Sirius Mineral, the company building a polyhalite mine near Whitby, warned the North’s failing transport network was letting it down. Speaking to

Mr Berry said: “Problems of transport across the north of England are not new. The great thing about the approach we’re taking with the Northern Powerhouse is acknowledging those challenges, setting out with Transport for the North a longterm plan including big projects like Northern Powerhouse Rail, but at the same time there’s real investment taking place today in our existing transport infrastructure.”

He said the proposal to spend £13bn by 2021 was more money than any Government in history had spent before and claimed people were already beginning to mark changes such as M62 improvements and a motorway from London to Newcastle with the A1M.

He said: “What we’re fighting against is a long-term, historic, under-investment in transport infrastructure.”