–Jan PSNB ex financial interventions -Stg3.735bn; median Stg0.3bn
–Jan PSNB -Stg5.252bn vs -Stg0.095bn in Jan 10; median -Stg0.4bn
–Jan Current Budget Stg8.472bn vs Stg4.139bn in Jan 2010
–Jan PSNCR -Stg14.36bn vs -Stg6.183bn in Jan 09; median -Stg8.5bn

LONDON (MNI) – Public Sector Net Borrowing posted its highest
surplus for two and half years in January, as income and capital gains
tax revenues rose strongly, figures released by National Statistics
showed Tuesday.

The figures will be welcomed at the Treasury as they appear to show
a brighter picture of the public finances than most economists had
expected.

Excluding financial sector interventions PSNB stood at -Stg3.735
billion in January (a surplus) compared with a deficit of Stg1.266
billion in January 2010. This was the largest surplus since July 2008.

On an accrued basis, receipts growth was up 12.4% compared with
January a year earlier, the strongest since April 2010. Income and
capital gains tax receipts rose 18.9% on the year, the highest since
January 2005.

Given the strength of income tax and capital gains receipts, a
National Statistics spokesman cautioned that some of this strength in
self-assessment receipts may unwind in February, although he was not
sure this may happen.

The deadline for HMRC to receive self-assessment receipts is the
end of January, but the spokesman said that in practice quite a few
receipts also came through in February.

Receipts growth was nearly three times higher than spending growth
in January, a welcome turnaround in the figures, with spending up 4.4%
on the year.

For the financial year to date receipts were up 8.4% while spending
was up 6%.

Including financial sector interventions PSNB posted a surplus of
Stg5.252 billion in January, compared with only a Stg0.095bn surplus in
January 2010.

The Treasury has put the focus firmly on the excluding financial
sector interventions measure as it believes the fluctuations in the
value of the stakes it took in the banking sector distort the underlying
picture of the public finances.

The current budget excluding financial sector interventions posted
a surplus of Stg8.472 billion in December, up from Stg4.139 billion in
January last year.

The Public Sector New Cash Requirement posted a net repayment of
Stg14.36 billion compared with a repayment of Stg6.183 billion in
January 2010.

–London bureau: email: drobinson@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]