"Borrowing is still likely to overshoot the Office for Budget Responsibility's Budget 2012 forecasts, but by much less than expected"
- Ross Walker, an economist at Royal Bank of Scotland Group Plc
U.K. posted its smallest September budget deficit since 2008, providing the government hope it can meet this year's deficit-cutting target. U.K. public sector net borrowing tumbled to £12.8bn last month, down from £13.5bn a year earlier. Despite the improvement in data, the government is still likely to announce cuts for future years.
"This is much, much better than they would have thought only a month ago," said Brian Hilliard, economist at Societe Generale. "It's still an overshoot compared to the plans but it does make their life a bit easier."
"Borrowing is still likely to overshoot the Office for Budget Responsibility's Budget 2012 forecasts, but by much less than expected," said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. "This will make for a much less awkward Autumn Statement for the chancellor and should assuage some of the recent concerns about the extent of the underlying deterioration in the U.K. public finances."
The FTSE 100 Index lost 0.35 per cent to 5,896.15. The broader FTSE All-Share Index inched lower 0.30 per cent to 3,079.65.
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