UK public finances dropping - TDS

FXStreet (Guatemala) - Tim Davis, Vice President in global strategist at TD Securities explained that since the UK Budget, public finance data has disappointed, largely due to disappointing tax receipts in spite of a decent pace of economic growth in the UK.

Key Quotes:

“Income tax revenues have disappointed largely due to a lack of wage growth with the large falls in unemployment seeing more people enter into either self-employment (which increases the lags before they pay tax) or lower paid jobs (which means that they might not earn significantly over the personal allowance)”.

“Indeed, the increase in low paid jobs combined by the increase in the personal allowance has significantly reduced income tax receipts”.

“However, there has also been weakness in other areas of taxation, such as stamp duty receipts due to the slowdown of house purchases”.