26 May 2015
UK borrowing to contract faster under Conservatives - ING
FXStreet (Guatemala) - James Knightly, analyst at ING Bank explained that UK government borrowing numbers are undershooting expectations, suggesting government aims of cutting full year borrowing to £75.3bn will be achieved.
Key Quotes:
"Annual Public Sector Net Borrowing excluding public sector banks peaked at £153.5bn in financial year 2009/10, but has been coming down consistently ever since. Admittedly it hasn’t shrunk as quickly as hoped given the improvements in the labour market and the strength of economic activity, but recent numbers suggest that the pace of fiscal improvement is accelerating."
"With the new Conservative government looking to make more cuts to department spending when the Budget is announced on 8 July, we expect to see government borrowing contracting faster than officially predicted. Indeed, the Office for Budget Responsibility predict a 2015/16 borrowing number of £75.3bn (equivalent to 4% of GDP) for 2014/15, whereas we look for a £71bn/ -3.8% of GDP outcome."
Key Quotes:
"Annual Public Sector Net Borrowing excluding public sector banks peaked at £153.5bn in financial year 2009/10, but has been coming down consistently ever since. Admittedly it hasn’t shrunk as quickly as hoped given the improvements in the labour market and the strength of economic activity, but recent numbers suggest that the pace of fiscal improvement is accelerating."
"With the new Conservative government looking to make more cuts to department spending when the Budget is announced on 8 July, we expect to see government borrowing contracting faster than officially predicted. Indeed, the Office for Budget Responsibility predict a 2015/16 borrowing number of £75.3bn (equivalent to 4% of GDP) for 2014/15, whereas we look for a £71bn/ -3.8% of GDP outcome."