Friday April 18, 09:45 AM
UK public finances meet Darling's Budget forecasts for 2007/8 fiscal year
LONDON (Thomson Financial) - UK Chancellor of the Exchequer Alistair Darling will be relieved to find that public finances for the fiscal year 2007/8 have come in within his Budget forecasts despite a higher-than-expected public sector net borrowing (PSNB) during March, official figures showed.
The Office for National Statistics said PSNB -- the government's preferred measure of borrowing -- jumped to 10.2 billion pounds in March -- the worst figure for any March and well above analysts' forecasts for a much smaller deficit of 8.0 billion pounds. In the same month last year, PSNB was 7.1 billion pounds.
This took the total PSNB for 2007/8 to 35.6 billion pounds, up from 30.1 billion in the previous year but within Darling's Budget forecast of 36.4 billion pounds.
The full-year figures were helped by revisions to back data, with February's shortfall revised down by 2.4 billion pounds to just 0.2 billion.
Elsewhere in the release, the current budget, which strips out government investment, stood at a deficit of 3.6 billion pounds in March compared with 1.3 billion pounds in the same month last year.
This takes the current budget deficit for the full fiscal year to 7.6 billion pounds, again within Darling's forecast of 7.9 billion.
The current budget is used when assessing the 'golden rule', devised by former chancellor Gordon Brown, which requires the government to balance the budget, excluding investment, across the economic cycle.
Meanwhile, an alternative but more volatile cash measure of the public finances showed a marked improvement on the previous year.
The public sector net cash requirement (PSNCR) stood at 12.7 billion pounds in March, down from 17.3 billion a year earlier, and much better than analysts' forecasts for a bigger shortfall of 18.5 billion pounds.
For the full fiscal year to end-March 2008, PSNCR shrank to 26.6 billion pounds from 35.3 billion in the previous year. This is well within Darling's Budget forecast for a bigger deficit of 33 billion pounds.
In addition, the figures showed net debt rose to 527.7 billion pounds in March from 499.5 billion in the same month last year.
This leaves net debt as a percentage of annual GDP at 36.7 percent, up from 36.6 percent in the same month last year. Again this is within Darling's Budget forecast of 37.1 percent.
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