"The UK public finances continue to show signs of improvement, though the absolute levels of the deficit are still large, with this year's deficit likely to come in over 6.5pc of GDP."
- David Tinsley, chief UK economist at BNP Paribas
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 Thursday, the Office for National Statistics said that net borrowing, excluding financial interventions, fell to 8.1 billion pounds in October, down from 8.2 recorded over the same period a year ago. Borrowing fell mostly due to the fact that tax receipts advanced 3.2%, with value-added tax soaring 6.4%. Meanwhile, spending inched up 1.2%. Figures also showed that public sector net debt reached 1.207 billion at the end of October, figure equivalent to 75.4% of the nation's GDP.
Another welcoming sign for British government is that total central government receipts soared 12.4% in October, compared with the same period a year earlier. Moreover, in case the momentum is kept up, the 2013-14 deficit could narrow to 106 billion pounds– the least since 2008-09. In March, the Office for Budget Responsibility predicted a 120 billion shortfall; however, better-than-expected figure would provide additional support for George Osborne. Meanwhile, Osborne would announce the fresh forecasts from the OBR in his Autumn Statement, the second most important event in public finances sector in the U.K., on December 5.
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