Government borrowing at its lowest since 2008

Government borrowing at its lowest since 2008

Government borrowing managed to fall by £20bn to £52bn, according to official data. The Office for National Statistics said this figure is also the lowest since the financial crisis of 2008 and it’s peak in 2010 following Labour’s spell in office between 1997 and 2010.

The Office for Budget Responsibility (OBR) had forecast the deficit would be slightly lower at £51.7bn. The OBR believes that government borrowing will rise again this year due to a fall in tax receipts.

The Chancellor, Philip Hammond has said he would like to cut the deficit at a slower rate than his predecessor George Osborne. He is quoted as saying “These positive figures are clear evidence of what is at stake at this election. Only Theresa May and the Conservatives offer the strong and stable leadership we need to lock in the economic progress we have made together”. He went on to say “Jeremy Corbyn would put our growing economy at serious risk”.

Shadow Chancellor, John McDonnell, said “the figures proved the Tories had failed on the economy” referring to the fact that the reduction in public borrowing to £52bn slightly missed the government’s target of £51.7bn.

However, John Hawksworth, an economist at PWC, said: “It is good news that the deficit is coming down, but it is too soon to be complacent about the state of the public finances. As the OBR said last month, a number of one-off factors relating to the timing of tax receipts and spending flattered the deficit figures for 2016-17 but are likely to be reversed in 2017-18.”

“So, while the deficit is now approaching a more sustainable level, there will still be some tough choices ahead on tax and spending for the next government”.

 

 

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