"The recent pick up we've had in the economy should definitely help. We should start to see some of the softer revenues that we've had pick up."
- Victoria Clarke, an economist at Investec Securities
British public sector net borrowing increased less than expected last month, suggesting the pace of government and public corporations spending slowed compared with how much they earn. On Tuesday, the Office for National Statistics said that net borrowing, excluding financial interventions, fell to 11.1 billion pounds in September, down from 12.1 recorded over the same period a year ago. Borrowing fell mostly due to higher income and corporation tax receipts, which advanced 13.1% and 16.1% consequently. Despite the improvement, the overall public sector net borrowing over this fiscal year to September surged to 44.5 billion, up from 34.6 posted in the prior year. The ONS also mentioned that there is currently a constantly increasing expenditure across the board, a figure which expected to be revised in the nearest future. The fact that the U.K. is now one of the fastest growing economies should help Chancellor of the Exchequer George Osborne to meet his budget targets. At the same time, the Office for Budget Responsibility, predict a shortfall of 120 billion pounds for this fiscal year, a figure equal to 7.5% of GDP.
Even though government spending is on a strong uptrend, George Osborne presented a spending review late in June, showing government's commitment to proceed with extensive fiscal cuts in 2015-2016 in order to push net borrowing back to more appropriate levels. Osborne also pledged that spending would be reduced by 11.5 billion during 2015-2016.
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