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Markets await UK public finances, as oil edges higher - live

Discussion in 'Market News' started by Lily, Dec 22, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    UK borrowing figures set to rise in November, as fuel VAT receipts hit by crude price fall

    7.33am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.

    After hitting 11 year lows on Monday, oil prices have shown some signs of recovery. A glut of supply as Iran restarts exporting following the lifting of sanctions, along with fears of slowing demand, mean the cost of crude is on course for its biggest monthly fall since the collapse of Lehman Brothers in October 2008.

    November generally tends to be a weak month in any case with December usually a little stronger as the tax year deadline gets closer. Even allowing for that the Chancellor looks set to fall short of his borrowing target for this tax year unless tax receipts start to improve substantially.

    The public finances are expected to show that the public finances saw year-on-year improvement in November but to also highlight that the Chancellor will need sharply higher tax receipts in January if he is to meet the fiscal target for 2015/16 contained in November’s Autumn Statement. Specifically, we expect Public Sector Net Borrowing excluding banks (PSNBex) to have narrowed to £11.5bn in November from £13bn in November 2014. We also estimate that the total PSNB narrowed to £10.7bn in November 2015 from £12.2bn in November 2014.

    The Office of Budget Responsibility argues that there should...be a substantial improvement in the public finances over the final months of 2015/16 due to a number of factors. This particularly includes an expected jump in self-assessment tax receipts in January resulting from past policy measures. The OBR also expects spending cuts to have an increasing impact as pressure to meet budget targets mounts on departments subject to Treasury controls.

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