Tuesday 22 May 2018

UK April 2018 Government borrowing falls to lowest leve since 2008

So the good news is that in April, Government borrowing fell to £6.2 billon, down from £7.3 billion the year before. Okay so as a percentage of UK Government spending who cares about a billion here or there, but as ever these things add up.

The critical piece is for me yet again this will show up the Bank of England forecasting and prediction capabilities. Last month they were quite happy to quote the UK GDP slows to 0.1% growth in Q1 of 2018. On the back of this they held interest rates at near record lows and enabled yet another spasm of Remainer questioning of Brexit.

However, when you see that the ONS also showed Public Sector Net Borrowing was down from £2.1 billion to £1.3 billion in March - also a ten year low, then we might wonder why.

Is Government spending much less? Well that is unlikely as our overall debt to GDP ration is still rising.

What is happening are rising tax receipts, Corporate tax, Inheritance tax and Stamp duty taxes have all shown strong growth over the past year. Rising tax receipts can only realistically happen in a growing economy unless they have been raised or reduced around the Laffer curve.

So for me something is amiss, there is no way the economy is producing a few billions in extra taxes over the first months of the year whilst also posting sclerotic growth - one of these numbers has to give.

My guess will be the first three months of the year will be revised up to around 0.3% GDP growth, not stunning but adequate in the circumstances. The annoying thing is that for the Remainiacs this will not affect their mantra of the economy is crashing due to Brexit when there is simply no evidence of this and to date all the evidence has been the to show that threat of Brexit has either no effect or a slight positive to date.


Anonymous said...

....just heard on the news Mark Carney saying household income has fallen by £900 per annum since the Brexit vote. He's another mad Remainiac blaming everything and anything on Brexit. No mention of the money we will save by not paying into the EU coffers. He also had the cheek to say £900 was a lot of money..........yes it is to the average soul but not to him and his cronies all on megabucks with their RPI-linked pensions lined up.

Another mad Remainiac on the Today programme ie TB.........I've no idea what he said as the minute I hear his voice I am compelled to turn the volume right down to zero.

miker22 said...

Carney is a disaster.

Anonymous said...

I still can't get over the fact that Lawrence Freedman, the academic who wrote Blair's 1999 Chicago speech outlining the 'Blair Doctrine' of military intervention, was then appointed as one of only four members (plus the chair) of the Chilcot inquiry into the war that resulted from the application of his doctrine. Has he no shame?