20 Jan 2016
UK: Public finances unlikely to show turnaround – Lloyds Bank
FXStreet (Delhi) – Research Team at Lloyds Bank, suggests that despite disappointing outturns in public finance data over the 15/16 fiscal year so far, November’s Autumn Statement painted a surprisingly upbeat forecast of lower borrowing and higher spending relative to plans from July.
Key Quotes
“The changes were afforded by an apparently improved outlook for tax receipts, one that jars with evidence of a recent softening in economic activity. With the inclusion of housing associations on the public balance sheet not reflected in officially adjusted estimates of borrowing until February’s release, comparisons against the government’s fiscal targets are set to remain challenging.
For November, we anticipate net borrowing of £11.3bn on the ex-banks measure, little changed from the £11.7bn recorded in December 2014. Prior to the arrival of seasonally-lumpy self-assessment receipts, this would still leave borrowing outturns in FY 15/16 meaningfully off-track.”
Key Quotes
“The changes were afforded by an apparently improved outlook for tax receipts, one that jars with evidence of a recent softening in economic activity. With the inclusion of housing associations on the public balance sheet not reflected in officially adjusted estimates of borrowing until February’s release, comparisons against the government’s fiscal targets are set to remain challenging.
For November, we anticipate net borrowing of £11.3bn on the ex-banks measure, little changed from the £11.7bn recorded in December 2014. Prior to the arrival of seasonally-lumpy self-assessment receipts, this would still leave borrowing outturns in FY 15/16 meaningfully off-track.”