U.K. public finances continued to rebound at the beginning of FY 2018/2019, with net borrowing in April of GBP 7.8 billion – the lowest figure for that month since 2008. This was a rebound of GBP 1.6 billion on April 2017, and leaves the Treasury well poised to achieve this year’s OBR projection of GBP 36.1 billion. Revisions to the earlier data signified that net borrowing for FY 2017/2018 is calculated at GBP 40.5 billion which is GBP 2 billion less than initially projected and an undershoot of nearly GBP 5 billion on the OBRs March projection – and a full GBP 18 billion better than it had expected a year ago.
The recent rebound might provide the Chancellor some scope for a giveaway in the Autumn Budget. But the recent weakness of activity might impact tax receipts and so the rate of fiscal rebound in the months ahead, and give him reason to stay cautious, noted Daiwa Capital Market Research.
In the meantime, the inclusion of new data and correction to a previous error lowered the stock of public sector net debt by 0.0 percentage point of GDP at the end of March to 85.4 percent of GDP.
At 20:00 GMT the FxWirePro's Hourly Strength Index of British Pound was bearish at -74.6822, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -33.3552. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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