It suggests performance on cutting the deficit is running ahead of the latest independent forecast by the Office for Budget Responsibility (OBR) that it should fall by 21.1 per cent for the full 2015/16 period.
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It was the first time since 2012 that government receipts exceeded outgoings in July.
Driven by an increase in tax receipts, government coffers also saw their first July surplus since 2012. But with debt over 80 per cent of GDP, the job is not done’. In the first four months of the fiscal year, the deficit narrowed by 23 percent to 24 billion pounds, leaving Chancellor of the Exchequer George Osborne on track to meet his full-year forecast of 69.5 billion pounds. It has borrowed £24bn this monetary yr, down £7.3bn – or virtually 25laptop – in contrast with a yr in the past.
Kern said, “The ability of Britain’s banking sector to generate profits and tax receipts was hit hard during the recession, and together with much lower oil and gas receipts means that the country’s ability to generate tax revenue is seriously reduced”.
The figures showed £18.5bn in income tax collected over the month – almost £1bn more than previous year and the best for July since the Office for National Statistics began collecting figures in 1997.
Samuel Tombs, senior UK economist at the consultancy Capital Economics, said it was too early in the financial year to conclude that “the second phase of the fiscal squeeze is going to plan”.
However it is worth noting that his figure is higher than July a year ago when it stood at £1.43trillion, or 79.7 per cent of GDP.
Osborne has vowed to wipe out a deficit of nearly 5 percent of gross domestic product within the current five-year parliamentary term and run surpluses during “normal” times thereafter.
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Underlying public sector net debt, at £1.51 trillion or 80.8% of GDP, was slightly down on June. Britain last had a surplus in the 2000-2001 fiscal year. Revenue from VAT rose three.3pc to £10.5bn and company tax elevated grew 5.2pc to £6.9bn.
