–Aug PSNB-X Stg15.934bn vs Stg14.003n in August 2010
–Aug PSNCR Stg11.834bn vs -Stg3.746bn in August 2010
–Aug Current Budget-X -Stg13.839bn vs Stg11.852bn in August 2010

LONDON (MNI) – UK Public Sector Net Borrowing hit a record level
for an August, but significant downward revisions to previous borrowing
estimates will leave Chancellor of the Exchequer George Osborne with a
little more room to manoeuvre should he be persuaded to ease the current
fiscal squeeze.

On the day after the BBC reported that the Cabinet was discussing
the possibility of boosting capital spending by Stg5 billion in response
to flagging growth, revisions by National Statistics has given the
Chancellor an extra Stg10 billion as he prepares to deliver the Autumn
Statement later this year.

Figures for 2010/11 now show net borrowing excluding financial
sector interventions revised down by Stg5.9 billion from Stg142.7
billion, putting it now below the Office of Budget Responsibility
forecast of Stg145.9 billion.

The bulk of these revisions came from actual local government data
where forecasts were previously used. The move to a new HMRC computer
system had also helped to boost tax in 2010/11.

Moreover, borrowing in the second quarter was revised lower by
Stg2.2 billion, again due to local government and the July outturn is
now estimated to be some Stg2.4 billion due to revisions to income tax.

So far, Osborne has refused to be moved from his fiscal austerity
measures in spite of numerous calls for the government to move to a Plan
B to increase growth.

These data clearly give the Chancellor a lot more wiggle room
should he be persuaded to ease off the fiscal constraint.

The August data taken alone made poor reading, with PSNB excluding
financial interventions rising to Stg15.934 billion, the highest August
outturn on record, and above the median of Stg13.1 billion.

Income tax receipts fell sharply in August compared with a year
earlier. National Statistics could not say why this was but did add that
as the data are accrued this may be revised next month.

–London bureau: 0044 20 7862 7491; email: drobinson@marketnews.com

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