UK DATA: July PSNB-X Stg0.557bn vs -Stg2.837bn in July 2011
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The public finances showed a surprise deficit in July, as spending
growth rose significantly during the month. The data, while affected by
a special factor which has reduced corporation tax, are disappointing
and show the finances further off track. Receipts growth on an accrued
basis was down 0.8% in July compared with a year earlier. Corporation
tax receipts were down 19.3% on the year, part of which was due to a
fall in corporation tax from the oil sector, mainly due to the closure
of the Elgin oil field. This cut corporation tax receipts by around Stg1
billion. For the financial year to date, receipts growth was up 1.1%.
Even stripping out the oil impact receipts would still have been
significantly below the Budget forecast of 3.9%. Spending growth was up
5.1% in July on the year. For the year to date spending was up 3.5%, but
this was still above the full year forecast of 3%.