Chancellor George Osborne is on track to meet his budget goal for this year, economists said on Tuesday after the latest public finance figures suggested a quickening economic recovery was boosting government coffers.
Public borrowing fell slightly more than expected in September as tax revenues picked up against a backdrop of upbeat business surveys and rising housing market activity, the data from the Office for National Statistics showed.
The ONS said the government's preferred measure of public borrowing, which strips out some of the effects of its bank bailouts, showed a deficit of £11.1bn last month. That was down from £12.1bn a year earlier, £13.2bn in August and slightly under the consensus forecast for £11.2bn in a Reuters poll of economists.
For the six months of the fiscal year so far borrowing has reached £56.7bn, putting Osborne on track to meet or beat his target for the year for borrowing of no more than £120bn.
Howard Archer, an economist at IHS Global Insight, said the chancellor was likely to "markedly beat" his target.
"At the halfway stage of fiscal 2013-14, the deficit is clearly below the targeted rate, and it seems likely that improved economic activity will increasingly feed through to help the public finances," he added.
The Treasury welcomed the latest public finance figures, which put the deficit at this halfway point down almost 10% on the same stage a year ago. A spokesman said: "Borrowing is down this month compared to last year and for the year-to-date.
The economy is turning a corner, but there is a long way to go and the government is sticking to the economic plan that has already cut the deficit by a third and enabled the private sector to create over 1.4m new jobs."
Economists said a 7% annual rise in tax revenues partly reflected the pickup in the property market, which some critics say has been dangerously over-inflated by the government's Help-to-Buy housing finance scheme.
Chris Williamson, economist at data group Markit, said: "Higher revenues from stamp duty, reflecting the recent property market upturn, buoyed revenues, as did higher VAT receipts as consumer spending continued to rise.
"Strong economic growth is likely to persist in coming months, boosting the government's tax-take further, especially from corporation tax, which should more than keep the deficit on target.
A figure of £105bn for the year is currently looking more likely than the government's £120bn target, which was set at a time when the economy was showing signs of renewed weakness, in contrast to today's picture of robust expansion."
But the Labour party said that the government was not meeting its longer-term targets.
Chris Leslie MP, Labour's shadow chief secretary to the Treasury, said: "Despite last month's welcome fall, the government's deficit plan continues to be way off track.
Three years of flatlining growth and falling living standards mean George Osborne is set to break his promise to balance the books by 2015. He's forecast to borrow over £200bn more than planned simply to pay for the costs of his economic failure."
theguardian.com
Public borrowing fell slightly more than expected in September as tax revenues picked up against a backdrop of upbeat business surveys and rising housing market activity, the data from the Office for National Statistics showed.
The ONS said the government's preferred measure of public borrowing, which strips out some of the effects of its bank bailouts, showed a deficit of £11.1bn last month. That was down from £12.1bn a year earlier, £13.2bn in August and slightly under the consensus forecast for £11.2bn in a Reuters poll of economists.
For the six months of the fiscal year so far borrowing has reached £56.7bn, putting Osborne on track to meet or beat his target for the year for borrowing of no more than £120bn.
Howard Archer, an economist at IHS Global Insight, said the chancellor was likely to "markedly beat" his target.
"At the halfway stage of fiscal 2013-14, the deficit is clearly below the targeted rate, and it seems likely that improved economic activity will increasingly feed through to help the public finances," he added.
The Treasury welcomed the latest public finance figures, which put the deficit at this halfway point down almost 10% on the same stage a year ago. A spokesman said: "Borrowing is down this month compared to last year and for the year-to-date.
The economy is turning a corner, but there is a long way to go and the government is sticking to the economic plan that has already cut the deficit by a third and enabled the private sector to create over 1.4m new jobs."
Economists said a 7% annual rise in tax revenues partly reflected the pickup in the property market, which some critics say has been dangerously over-inflated by the government's Help-to-Buy housing finance scheme.
Chris Williamson, economist at data group Markit, said: "Higher revenues from stamp duty, reflecting the recent property market upturn, buoyed revenues, as did higher VAT receipts as consumer spending continued to rise.
"Strong economic growth is likely to persist in coming months, boosting the government's tax-take further, especially from corporation tax, which should more than keep the deficit on target.
A figure of £105bn for the year is currently looking more likely than the government's £120bn target, which was set at a time when the economy was showing signs of renewed weakness, in contrast to today's picture of robust expansion."
But the Labour party said that the government was not meeting its longer-term targets.
Chris Leslie MP, Labour's shadow chief secretary to the Treasury, said: "Despite last month's welcome fall, the government's deficit plan continues to be way off track.
Three years of flatlining growth and falling living standards mean George Osborne is set to break his promise to balance the books by 2015. He's forecast to borrow over £200bn more than planned simply to pay for the costs of his economic failure."
theguardian.com
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