"The large decline in corporation tax receipts highlights the need to support growing companies with the ability to make profit"
- David Kern, chief economist at the British Chambers of Commerce
The U.K. saw its budget surplus widened last month, as the Treasury received the first payment of gilt- coupon income from the Bank of England's asset-purchase programme. The U.K.'s public finances recorded a surplus of £11.4 billion in January, £5 billion higher than in the same month last year, and up from £6.4 billion in the preceding month. On January 7, the BoE transferred £3.8 billion to the Treasury. January often records a surplus due to an influx of tax money from self-employed people and businesses, however, this month corporation tax receipts were down 13.5%. The report by the Office for National Statistics also showed that public sector net borrowing, which excludes financial interventions, stood at £93.8 billion for the financial year to date.
"There is a modest trend improvement in the public finance figures, but until we've got past all these weird and wonderful one-offs, we can't get an accurate picture of what's really going on," Peter Dixon, an economist at Commerzbank AG in London, said in a telephone interview. "Weakness in the economy will continue to constrain the government's ability to bring down the deficit as fast as they'd like."
"The large decline in corporation tax receipts highlights the need to support growing companies with the ability to make profit," said David Kern, chief economist at the British Chambers of Commerce.
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