UK Good housekeeping
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
This week, the UK achieved a long-awaited milestone. The current budget for the latest full fiscal year based on so called ‘day to day’ spending has been fully covered by tax revenues.
The surplus, which excludes capital investment on infrastructure projects such as new underground stations, schools and roads, stands at £112m. This is the first time that a surplus has been recorded in 16 years and represents a tremendous achievement. Government revenues (i.e. taxes) have been much higher than forecast, growing at 3.3% this year. Growth in tax revenue is being underpinned by record low levels of unemployment with more people able to make tax contributions.
It is worth noting that elimination of the deficit in the prior fiscal year has been achieved 1 year sooner than the Office for Budget Responsibility predicted last month. The next step to be taken is to eliminate the overall deficit, which fell by £3.5bn to £42.6bn, a level not seen since March 2007.
The target for eliminating the overall deficit has however been pushed back. Calls for an end to austerity have already slackened the pace of remedying the problem and it comes as no great surprise to anyone that the Chancellor is under increasing pressure to loosen the purse strings in the years ahead.
Monthly Government Current Budget Revenue and Expenditure
Source: Office for National Statistics, March 2018.
