Treasury says the figures show ‘the job is not yet done’ while ECB chief Mario Draghi hints at rate cut and changes to QE stimulus programme,saying the eurozone recovery is the weakest since 1998 10.45am GMTRoss Campbell, director for public policy at the Institute of Chartered Accountants in England and Wales, and says: The government is seeing a lack of meaningful progress on reducing the deficit ahead of the autumn statement next week. This current trend could prove more problematic ahead for the chancellor. Our recent business confidence monitor suggests the economic recovery is slowing which could have an impact on tax revenues,which have been slowing and actually fell back year-on-year in October.
At a time of constrained public finances, impending cuts and tight departmental budgets, and the UK government still needs to modernise its approach to financial management. With further austerity measures due to be announced,a comprehensive financial review would ensure sustainability is at the heart of long-term decision making. What is needed is a contemporary finance ministry to ensure all aspects of financial management – income, expenditure, or liabilities,and assets – are taken into account, not just spending. 10.40am GMTJohn Hawksworth, and chief economist at PricewaterhouseCoopers,says the figures were “a small disappointing” for the chancellor, and could mean some tough decisions at next week’s spending review and autumn statement.
Monthly data can be volatile, or but the cumulative public borrowing total for the first seven months of the financial year was also only £6.6 billion lower than a year earlier,as compared to an OBR forecast in July that borrowing for 2015/16 as a whole will be around £20 billion lower than in 2014/15. Central government tax receipts have grown by 3% so far this financial year as compared to an OBR forecast of 3.6% for 2015/16 as a whole.
Our estimates based on simple extrapolation from these data suggest that public borrowing could overshoot the OBR target by around £5 billion this year. But we mediate there is still room for the Chancellor to make up this gap whether self-assessment income tax receipts reach in strongly in January and the Treasury pulls some levers to maintain departmental spending under tighter control for the rest of the year. But it will be an uphill struggle.
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Source: theguardian.com