{"id":186257,"date":"2023-08-26T05:21:37","date_gmt":"2023-08-26T05:21:37","guid":{"rendered":"https:\/\/newsneednews.com\/?p=186257"},"modified":"2023-08-26T05:21:37","modified_gmt":"2023-08-26T05:21:37","slug":"government-borrowing-less-than-expected-thanks-to-stealth-tax-income","status":"publish","type":"post","link":"https:\/\/newsneednews.com\/world-news\/government-borrowing-less-than-expected-thanks-to-stealth-tax-income\/","title":{"rendered":"Government borrowing less than expected thanks to &apos;stealth tax&apos; income"},"content":{"rendered":"<h2>UK Government borrowing is lower than expected in July as Treasury coffers are boosted by &#8216;stealth tax&#8217; income &#8211; raising hopes that Jeremy Hunt could announce cuts before the next election<\/h2>\n<ul>\n<li><strong>ONS said public sector borrowing stood at \u00a34.3 billion in July this year<\/strong><\/li>\n<li><strong>Figure is \u00a33.4 billion more than July 2022 and fifth highest July on record<\/strong><\/li>\n<\/ul>\n<p>Government borrowing was lower than expected in July, according to official figures that will raise hopes of tax cuts before the next general election.\u00a0<\/p>\n<p>The Office for National Statistics (ONS) said public sector net borrowing, excluding state-owned banks, stood at \u00a34.3 billion in July, \u00a33.4 billion more than the same time a year ago.<\/p>\n<p>The figure is substantially lower than in recent months due to higher receipts of self-assessed income tax last month.\u00a0But it is still the fifth highest July borrowing since records began.<\/p>\n<p>The ONS said that government revenue included increases in Income Tax, Corporation Tax and VAT compared to the same time last year.\u00a0<\/p>\n<p>Income tax thresholds have been frozen since 2021, meaning millions more people are being dragged into higher bands due to inflation.<\/p>\n<p>Borrowing will be in sharp focus ahead of next year&#8217;s expected general election, with Mr Hunt and Prime Minister Rishi Sunak under pressure from within the Conservative Party to cut taxes to improve their chances at the polls.<\/p>\n<p>Ellie Henderson, of Investec Economics, said the data &#8216;arguably increases&#8217; the headroom that the Chancellor may have to cut taxes and boost election suport.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/08\/22\/12\/74593665-0-image-a-35_1692704228495.jpg\" height=\"402\" width=\"634\"><\/p>\n<p>The Office for National Statistics (ONS) said public sector net borrowing, excluding state-owned banks, stood at \u00a34.3 billion in July, \u00a33.4 billion more than the same time a year ago.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/08\/22\/12\/74593663-0-image-a-36_1692704231987.jpg\" height=\"314\" width=\"634\"><\/p>\n<p>The ONS said that government revenue included increases in Income Tax, Corporation Tax and VAT compared to the same time last year.<\/p>\n<p>But she added: &#8216;We would note that substantial drains on the public finances are still in the pipeline, a fact that Chancellor Hunt will be well aware of.<\/p>\n<p>&#8216;One example is from the triple-lock, which is set to involve a large bill due to its commitment for pension rises to match the still elevated rates of wage growth.&#8217;<\/p>\n<p>The ONS said that government income was\u00a0\u00a385.2 billion, \u00a33.4 billion more than in July 2022.<\/p>\n<p>Of this \u00a385.2 billion, tax receipts were \u00a365.6 billion, \u00a33.9 billion more than in July 2022.<\/p>\n<p>Within this there were increases in income taxes, corporation tax and Value Added Tax (VAT) receipts of \u00a33.5 billion, \u00a30.7 billion, and \u00a30.6 billion, respectively.<\/p>\n<p>Most economists had expected borrowing of \u00a34.9 billion in July, while the UK&#8217;s official forecaster, the Office for Budget Responsibility (OBR), had predicted \u00a36 billion.<\/p>\n<p>The ONS added that net debt stood at \u00a32.58 trillion at the end of July, equal to around 98.5 per cent of the UK&#8217;s gross domestic product (GDP) and 1.9 per cent higher than a year earlier.<\/p>\n<p>It had said last month that the Government&#8217;s debt pile had exceeded the UK&#8217;s economic output for the first time since 1961, but the latest data showed that stronger-than-expected gross domestic product (GDP) in recent months saw June&#8217;s net debt figure revised down to 99.5 per cent.<\/p>\n<p>Official figures earlier this month estimated that the economy grew by a better-than-forecast 0.2 per cent between April and June.<\/p>\n<p>The ONS said that borrowing in the first four months of the financial year so far stood at \u00a356.6 billion, which was \u00a313.7 billion more than the same period last year, but \u00a311.3 billion less than the \u00a368 billion forecast by the OBR.<\/p>\n<p>Chancellor Jeremy Hunt said: &#8216;As inflation slows, it&#8217;s vital that we don&#8217;t alter our course and continue to act responsibly with the public finances.<\/p>\n<p>&#8216;Only by sticking to our plan will we halve inflation, grow the economy and reduce debt.&#8217;<\/p>\n<p>But Gabriella Dickens, at Pantheon Macroeconomics, said the outlook for debt interest payments is still painful and may see the Government offered little &#8216;wiggle room&#8217;.<\/p>\n<p>The interest the Government paid on its debt hit \u00a37.7 billion in July &#8211; \u00a31.5 billion more than a year earlier and the highest seen for any July since records began in 1997.<\/p>\n<p>Britain&#8217;s debt interest bill has been rocketing over the past year, reflecting the impact of sky-high retail prices index (RPI) inflation on index-linked gilt stock.<\/p>\n<p>Inflation is easing back from highs seen in October last year, which is expected to lead to reductions in the Government&#8217;s debt interest payments from next month.<\/p>\n<p>But Ms Dickens said: &#8216;Our calculations suggest that the OBR likely would revise up its forecast for debt interest payments by around \u00a340 billion in 2024\/25 and by around \u00a320 billion in five years&#8217; time if it were to produce the equivalent forecasts using today&#8217;s market expectations for Bank Rate and the current level of gilt yields.&#8217;<\/p>\n<p>And while borrowing is set to come in below the OBR&#8217;s forecast for the 2023-24 financial year, she said: &#8216;We still doubt, however, that the Chancellor will have enough wiggle room to meaningfully cut taxes or increase expenditure in the run up to the next general election, which must be held by January 2025.&#8217;<\/p>\n<p>Source: <a href=\"https:\/\/www.dailymail.co.uk\/news\/article-12432729\/Borrowing-lower-expected-July-Treasury-coffers-stealth-tax-cuts.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>UK Government borrowing is lower than expected in July as Treasury coffers are boosted by &#8216;stealth tax&#8217; income &#8211; raising<\/p>\n","protected":false},"author":2,"featured_media":186256,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Government borrowing less than expected thanks to &amp;apos;stealth tax&amp;apos; income - News Need News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/newsneednews.com\/world-news\/government-borrowing-less-than-expected-thanks-to-stealth-tax-income\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Government borrowing less than expected thanks to &amp;apos;stealth tax&amp;apos; income - News Need News\" \/>\n<meta property=\"og:description\" content=\"UK Government borrowing is lower than expected in July as Treasury coffers are boosted by &#8216;stealth tax&#8217; 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