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UK February public sector surplus beats forecasts
The UK's budget surplus widened further at the start of the year, with economists optimistic that Westminster was set to overshoot its own targets for fiscal consolidation.
Public sector net borrowing was £7.2bn less in January, taking the tally for the financial year-to-date to £37.7bn, according to the Office for National Statistics.
Excluding public sector banks, borrowings were lower by £10bn, which while less than the £11.6bn of a year ago, was nevertheless better than the -£9.5bn which economicts had penciled in.
According to Samuel Tombs at Pantheon Macroeconomics, the main reason for the lower surplus this year was that government revenues were boosted last year by individuals bringing forward income in order to avoid the April 2016 hike in taxes on dividends.
So while multiple factors were expected to boost borrowings in February, for the financial year as a whole borrowings were expected to total £38.5bn, which was well below the £49.9bn forecast by the Office for Budget Responsibility in November's Budget, he added.
"Unfortunately, however, the Chancellor's decision to hold just one main fiscal event a year in the autumn-the Spring Statement on March 13 will be just an exercise in forecast housekeeping-means that the fiscal consolidation will intensify modestly from April, helping to prevent the economy from recovering from last year's slowdown."